It’s a simple question, but one you’ve probably heard different answers for. As a business owner, how long do you have to keep your tax records? Is there a statute of limitation of how far back they can go to audit you?
Well, here’s the answer, straight from the source. According to the Canada Revenue Agency, “if you file your return on time, keep your records for a minimum of six years after the end of the taxation year to which they relate.”
The CRA defines these as supporting documents, which can include:
■ Sales invoices;
■ Purchase receipts, contracts;
■ Bank deposit slips, cancelled cheques;
■ Cash register slips, credit card receipts; purchase orders;
■ Work orders;
■ Delivery slips;
■ Emails; and
■ General correspondence in support of the transaction.
The CRA is very reasonable and they recognize the world is shifting to digital records. So they are willing to accept:
■ Books, records, and supporting documents produced and retained in paper format;
■ Books, records, and supporting documents produced on paper, and subsequently converted to and stored in an electronically accessible and readable format; and
■ Electronic records and supporting documents produced and retained in an electronically accessible and readable format
If you have any questions about record keeping or any other tax accounting services , please contact a member of our staff.