According to the Income Tax Act in Canada, you are required to keep supporting documents for your tax returns especially if you do not submit the supporting documents to the Canada Revenue Agency when you file your income tax and benefit return.
Canadian Personal Tax Records
As an individual taxpayer in Canada, your personal tax records include all documents that support the income that you have reported and tax credits or deductions that you have claimed in the tax year.
When you file your income tax and benefit returns, the CRA may request supporting documents.
If they do not, you are expected to keep all your tax records and documents for at least six years.
What Records to Keep
For every year you file a tax return, you should keep original copies of documents supporting your income, qualifying expenses for tax credits and deductions, tax returns, and reassessments.
Examples of supporting documents to keep include, tax slips, statements of income, bank statements, cheques, receipts, pension statements, registered account statements, capital gains records, and property purchase or sale/exchange documents.
Your supporting documents should show names, addresses, dates, and amounts.
Where to Keep Records
Generally, you should keep your tax records and documents at your residence where you live.
Your original supporting documents should be accessible and made available to the CRA if required.
Canadian Business Tax Records
Your business is required by law to keep all records of your income and expenses, and other supporting documents that show your business transactions.
How Long to Keep Business Tax Records
Similar to individual tax records, you should keep business records and supporting documents for six years from the end of the last tax year, which is typically the end of the fiscal period for your business.
There may be exceptions to the six-year requirement if you fall under certain situations as described by the CRA.
What Records to Keep
For tax purposes, you are required to keep records for your business income, expenses, and certain assets such as properties.
Here are examples of records that the CRA expects you to keep:
- Income: You should keep documents of your gross income —revenue before deducting expenses. Documents showing your gross income from goods sold, services performed, and properties must include the date the income was received, the amount received, and the source of the income. Examples of income-related documents are sales invoices, cash register tapes, receipts, bank deposit slips, fee statements, sales slips, records of sale, cheque stubs, and contract agreements.
- Expenses: When you incur business expenses, your supporting documents such as receipts or vouchers can be requested by the Canada Revenue Agency and should be kept safe. Your business expense receipts should show details such as the date you made a purchase, the name and address of the seller or supplier you purchased from, your business name and address, a detailed description of the goods or services purchased, and the vendor’s business number if they are registered for goods and services tax (GST), or harmonized sales tax (HST).
- Property documents: If you purchased, sold, or exchanged property for business purposes, you need to keep records of your transactions. The property supporting documents should show who you sold the property to or traded the property with, the full names and addresses of all parties involved in the transactions, the cost of the property, and the date that the transaction took place.
- Other documents: Other business documents that you need to keep are logbooks, journal entries, goods and services tax/harmonized sales tax (GST/HST) returns, excise tax returns, income tax returns and financial statements. Depending on whether your business is a corporation, trust, charity, or registered agent for political parties, you will be required to keep certain records that are specific to your type of organization.
Where to Keep Records
Your business supporting documents should be kept at your registered business address or where you live.
The CRA requires that all supporting documents be kept in Canada except if you have been granted written permission to keep them elsewhere.
Frequently Asked Questions
- How long should I keep bank statements in Canada?
- How long should you keep RRSP statements?
