According to the Income Tax Act, you need to keep business tax records for a minimum of six years from the end of the taxation year to which the records and books relate.
If You Want to Correctly Keep Business Tax Records in Canada, You Should Have All:
- Sales Invoices
- Contracts and Guarantees
- Loan agreements
- Bank statements and cancelled cheques
- Credit card statements
- Purchase orders and invoices for significant capital assets
- Timesheets for employees
- Legal documents
- Travel logs, for the relevant taxation year.
CRA understands that the accounting world has shifted significantly to keeping electronic documents versus paper documents. They are willing to accept the following:
- Electronic records in an electronically readable and useable format made available to CRA auditors to allow them to process the electronic records on CRA equipment
- Records and supporting documents produced and retained in paper format.
If you have any further inquiries about record keeping, please don’t hesitate contact your DMCL advisor.