In Canada, you must keep your business and tax records for at least six years from the end of the last tax year they relate to. For example, records supporting your 2025 tax return must be kept until the end of 2031. This applies to receipts, invoices, bank statements, payroll records, and GST/HST documents.

The rule comes from the Income Tax Act, and the Canada Revenue Agency (CRA) states it plainly in its official guidance on keeping records. The same six-year standard applies whether you’re a sole proprietor, a partnership, or a corporation.

Why the CRA Asks for Six Years

The CRA can review and reassess past returns, and in cases of misrepresentation or unreported income, it can look back even further than its normal reassessment window. Six years gives the CRA enough room to verify your income, deductions, and credits if questions come up.

For you, those records are proof. If you claimed a home office, vehicle expenses, or input tax credits, your receipts are what back those claims up. Without them, the CRA can deny the deduction, even if the expense was legitimate.

What Records You Need to Keep

The CRA expects records that clearly show your income, expenses, and tax obligations. That includes both paper and electronic files.

Common records to hold onto include:

• Sales invoices, receipts, and cash register records
• Purchase invoices and expense receipts
• Bank and credit card statements
• Payroll records, including T4 slips and remittance records
• GST/HST returns and supporting invoices
• Contracts, leases, and loan agreements
• Asset purchase and sale documents
• Copies of filed tax returns and notices of assessment

If you’re unsure whether something counts, keep it. It’s far easier to store an extra document than to rebuild one during an audit.

When You Need to Keep Records Longer

Six years is the minimum, not the maximum. Several situations stretch the timeline.

1. Late-filed returns: If you file a return late, keep the records for six years from the date you actually filed it.
2. Capital property: Keep records for equipment, vehicles, real estate, or investments for as long as you own the asset, plus six years after the tax year you sell or dispose of it.
3. Loss carryforwards: If you carry a business loss forward, keep the records for six years after the year you fully use that loss.
4. Objections and appeals: If you’ve filed a notice of objection or appeal, keep everything related until the matter is resolved and the appeal period has passed.
5. CRA requests: The CRA can formally ask you to keep specific records longer, and it will notify you directly if it does.

Special Rules for Corporations and Closed Businesses

Corporations have a few extra obligations. Corporate records such as minute books, share registers, and bylaws should be kept for as long as the corporation exists, since they document ownership and key decisions over its lifetime.

If your business winds down, the rules change slightly:

• Unincorporated business that closes: Keep records for six years from the end of the tax year in which the business ended.
• Dissolved corporation: Keep all records for two years after the date of dissolution.
• Amalgamated corporations: The new company must keep the records of each predecessor corporation for the standard six-year period.

GST/HST and Payroll Records

GST/HST records follow the same six-year rule. The CRA’s page on GST/HST records to keep notes that supplier invoices need the correct details to support your input tax credit claims, so incomplete invoices can cost you money.

Payroll records also fall under the six-year federal rule. In Ontario, the Employment Standards Act adds its own requirements for certain employee records, so it’s worth keeping payroll files organized from day one. If payroll feels overwhelming, our payroll services can keep your records compliant and audit-ready.

Can You Keep Records Digitally?

Yes. The CRA accepts electronic records as long as they’re readable, complete, and can be produced when requested. Scanning receipts is a smart move, especially thermal paper receipts from gas stations and restaurants, which can fade within a year or two.

A few rules still apply to digital storage:

• Records must be kept at your place of business or residence in Canada, unless the CRA gives written permission otherwise.
• Files stored on servers outside Canada don’t count as “in Canada,” even if you can access them here.
• Back up your files regularly so a hard drive failure doesn’t wipe out years of records.

Can You Destroy Records Early?

Not without permission. If you want to destroy records before the six-year period ends, you must submit Form T137, Request for Destruction of Records, to the CRA and wait for written approval.

Once the full retention period has passed, and none of the exceptions above apply, you can safely shred or delete those files. Use secure shredding for paper documents, since they often contain banking details and personal information.

Common Record-Keeping Mistakes to Avoid

Many small business owners only discover gaps in their records when the CRA sends a review letter. The most common issues include:

• Tossing receipts once the return is filed
• Mixing personal and business transactions
• Relying on bank statements alone without supporting invoices
• Losing digital files without a backup

We cover more of these pitfalls in our guide to bookkeeping mistakes and how to avoid them. Good records also make life easier if you ever need to correct a mistake on your tax return.

Let Wales Accounting Keep Your Records in Order

Proper record-keeping isn’t just about compliance. It gives you a clear view of your finances and peace of mind if the CRA ever comes calling. Our accounting and bookkeeping team helps Richmond Hill businesses organize, store, and maintain records the right way, and our income tax filing services make sure every claim is properly supported.

Call us at (905) 508-9262 or visit our office at 9555 Yonge St Unit 309, Richmond Hill, ON. You can also contact us online to book a consultation.