How Long Do I Need to Keep Business Records in Canada?

CRA's rule is six years, but the six years don't start when you buy something or when you file your return. They start at the end of the tax year the record belongs to. That's where most people miscount. The goal isn't to keep every scrap of paper forever. It's to keep the evidence that backs up the numbers you reported.

What the six-year rule means

A tax year is the 12-month period your tax return covers. For a sole proprietor, that's usually the calendar year, January 1 to December 31. For a corporation, it's the fiscal year, the 12 months ending on the year-end date the corporation chose.

CRA says to keep your records for six years from the end of the last tax year they relate to, unless CRA gives you written permission to destroy them sooner. The details are on CRA's page about keeping records.

Two examples:

• A sole proprietor buys supplies in March 2026. That purchase belongs to the 2026 tax year, so the receipt needs to be kept until December 31, 2032.
• A corporation with a June 30 year-end buys supplies in August 2026. That purchase belongs to the year ending June 30, 2027, so the receipt needs to be kept until June 30, 2033.

What counts as a record

Receipts are only part of it. Records include sales invoices, bank and credit card statements, contracts, payroll records, GST/HST returns, your vehicle mileage log, and the data inside your accounting software. Electronic records count the same as paper ones.

When six years isn't enough

Some records stay longer:

• Late-filed income tax returns. For a late-filed income tax return, the six years run from the date you filed it. Don't assume the same calculation applies to other types of filing.
• Equipment, vehicles and other capital property. Capital property is something you buy to keep using in the business, like a van or a computer. Keep the purchase records until six years after the end of the tax year you sell it. Buy a van in 2021 and sell it in 2026, and those records stay until the end of 2032. If the asset sits in a shared capital cost allowance pool (the tax deduction for the wear on equipment), the records can stay relevant even longer, so ask your accountant when it's safe to let go. See also what happens when you sell a business vehicle.
• Losses you carry forward. Keep the records behind the loss until six years after the last year you use it.
• Closed businesses. A sole proprietor generally keeps records for six years from the end of the last tax year they relate to. CRA has a two-year retention rule for the records of a dissolved corporation, but other legal requirements may apply. Confirm before destroying records.
• Objections and appeals. Keep everything until the matter is settled.
• A written request from CRA. If CRA tells you to keep records longer, that overrides the six years.

Where records have to be kept

CRA expects your books and records to be kept at your place of business or home in Canada. That's a different question from where a software company's servers happen to sit. CRA's position is that records stored on servers outside Canada don't count as kept in Canada, even if you can open them from here, unless CRA has given written permission. It can give that permission, with conditions such as making the records available to CRA officials in Canada in a readable electronic format.

This doesn't mean you can't use cloud accounting software. It means you need to understand where your records are stored, whether you have an accessible, complete copy in Canada, and whether your arrangement meets CRA's requirements. A backup is sensible, but it doesn't automatically resolve every record-location requirement.

Destroying records early

You need CRA's written permission to destroy records before the six years are up. CRA's own guidance warns that destroying them without permission can lead to prosecution.

Where people go wrong

• Counting from the receipt date instead of the end of the tax year.
• Tossing equipment and vehicle purchase records at six years while they still own the asset.
• Cancelling software without exporting the data. If the subscription ends and the data goes with it, the record is gone.
• Keeping receipts but not the supporting pieces. Bank statements, contracts and invoices back up the receipts.
• Shredding paper before checking the scan is readable. See whether photos of receipts are good enough for CRA.

Missing paperwork from the past is a different problem. If that's where you are, start with can I claim an expense if I lost the receipt?

Good records come from a routine, not a purge once a year. The RSB Guide takes you through the monthly routine that produces them, and the Guided plan adds a dashboard that keeps your CRA deadlines and monthly close checklist in front of you. If you're unsure whether you still need to keep something, ask Margot (bottom right of this page, free to try, no sign-up). She'll help with your situation or tell you when it's one for your accountant.

FAQ

Does the six-year rule apply to GST/HST records? Yes. GST/HST records follow the same six-year framework.

Can I destroy records after six years without asking CRA? Yes, once the six years have passed and none of the longer-retention situations above apply.

Do payroll records follow the same rule? CRA's six-year rule covers payroll records too. Provincial employment laws can set their own minimums, so check those separately.

What if I close my business? You still have to keep the records. A sole proprietor generally keeps them for six years from the end of the last tax year they relate to. CRA has a two-year rule for a dissolved corporation's records, and other legal requirements may apply, so confirm before destroying anything.

Follow the system. File with confidence.