How Long to Keep Your Business Documents According to CRA
If you’ve been in business or a solopreneur/self employed for some time, you’ve probably wondered how long you need to keep your business related documents. Shoeboxes and/or filing cabinets take up physical space that is often limited and can be better used for more important things (like a nice cabinet or artwork).
Unfortunately, you can’t just dispose of these business related records at anytime. The Canada Revenue Agency (CRA) has strict rules about where your records must be kept, how long you need to keep them, and what to do if you want to destroy them before the end of the specified retention period.
Where to Keep Your Records
The CRA requires you to keep your business records at your place of business or residence in Canada, unless you receive written permission to keep them elsewhere.
If your records are stored electronically on a server outside of Canada, that doesn’t count as “in Canada” even if you can access them from here.
You can request permission to keep records outside of Canada by writing to your tax services office. The CRA will likely approve your request, but they’ll specify any terms or conditions in writing.
If approved, you must ensure that the CRA can access your records electronically in Canada, that the files are readable using CRA software, and that they provide enough detail to support the information on your returns.
Tip: If you’re using cloud accounting software (like QuickBooks Online or Xero), its a good idea to check where your data is hosted.
Tip: Both CRA and RQ accept electronic documents as long as there are clear and legible and complete. For more details check out my article on digitizing your documents and maintaining a paperless office.
For more details on the rules, check out CRA’s guidance in Information Circular IC05-1 (Electronic Record Keeping) and GST/HST Memorandum 15.2 (Computerized Records).
How Long to Keep Your Records
In general, you must keep all business records and supporting documents for six years from the end of the last tax year they relate to.
That includes:
Invoices and receipts (sales and expenses)
Bank and credit card statements
Tax returns and schedules
Payroll, GST/HST, and other supporting records
Your tax year is:
The fiscal year for corporations
The calendar year for sole proprietors and individuals
So, for example, if your 2025 tax year ends on December 31, you must keep those records until December 31, 2031.
Exceptions and Special Cases
There are several situations where the retention period is longer (or shorter):
Property and share records: Keep indefinitely, since they can affect future capital gains or liquidation.
Late-filed returns: Keep records for six years from the date the return was filed.
Objections or appeals: Keep everything until the later of (a) the objection/appeal is resolved, (b) the appeal period has passed, or (c) the six-year period has ended.
Unfiled GST/HST returns: You must still file them and keep supporting records as the six-year clock doesn’t start until they’re filed.
Dissolved corporations: Keep all records for at least two years after dissolution.
Business closure (unincorporated): Keep records for six years from the end of the tax year in which the business closed.
Mergers or amalgamations: The new corporation must keep the records of all former entities for six years.
Deceased taxpayers or trusts: You can destroy records once a CRA clearance certificate has been received.
Tip: When in doubt, keep it! Digital storage is inexpensive, and keeping good records can save time and stress in an audit or sale.
How to Request Permission to Destroy Records Early
If you want to destroy your paper or electronic records before the end of the retention period, you must get written permission from the CRA.
You can:
Fill out Form T137 – Request for Destruction of Records, or
Write to your tax services office explaining your request
Destroying records without CRA permission could result in penalties or prosecution.
Keep in mind, CRA approval only applies to records under federal tax legislation. You may need to comply with provincial or municipal record retention rules as well.
Tip: If your records were destroyed in a disaster, visit the CRA’s “Support if You’re Affected by a Disaster” page for instructions on what to do.
Final Thoughts
The easiest way to ensure that you are compliant with these rules is to make maintaining records as part of your regular workflow.
Use accounting software that automatically stores receipts and transactions.
Organize digital folders by year and category.
Back up your data securely (ideally both in the cloud and locally).
To summarize, it is essential that you keep your business records in Canada (unless you have CRA permission), hold on to them for at least six years, and don’t destroy them early unless you have written approval.
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