How long to keep business records in Canada: CRA requirements

Canada’s record-keeping regime has one number, six years, and three rules around it that catch businesses out: the clock starts at the end of the tax year, the records have a required home (Canada), and electronic records must stay electronic. The CRA sources for each are in the Sources section.

Six years, measured from year end

Business records must be kept for a minimum of 6 years from the end of the latest tax year to which they relate ^[1] . The “end of the tax year” anchor means a document’s effective life depends on where in the fiscal year it falls: for a December year end, a January 2026 invoice and a December 2026 invoice both stay until the end of 2032.

GST/HST records follow the same 6-year discipline, and records supporting capital property, loss carryforwards, and anything under objection or appeal need to survive as long as the positions they support remain open.

The location rule

Records must be kept at your place of business or residence in Canada, unless the CRA gives written permission to keep them elsewhere ^[2] . The CRA is explicit about the cloud-era corollary: records hosted outside Canada and merely accessed electronically from Canada are not records kept in Canada ^[2] . With permission, the CRA may accept copies it is satisfied are true copies ^[2] .

For a small business this mostly resolves into one question to ask any software vendor: where do the data and document images physically reside, and can Canadian residency be ensured? Mainstream Canadian deployments of the major accounting platforms address this; informal storage in personal overseas-hosted drives does not.

Electronic records: once digital, stay digital

The CRA accepts electronic records, with a requirement that surprises people: records created or kept electronically must be retained in an electronically readable format for the full period, even when printouts exist ^[3] . A printed PDF does not discharge the obligation for the underlying electronic record. Scanned images of paper originals are acceptable when produced under proper imaging practices ^[3] .

The practical reading: treat the digital object attached to the ledger as the canonical record, keep it readable and exportable, and treat paper as disposable input once a true image exists.

Destroying records early needs paperwork

There is a formal route to early destruction: Form T137, or written authorisation from the CRA ^[2] . Destroying records inside the 6-year window without it can mean prosecution ^[2] . In practice, almost no small business needs early destruction; the form exists mainly for wind-ups and estates. The default policy should simply be: nothing goes before its sixth anniversary of year end, and nothing connected to an open objection goes at all.

What counts as “records”

The CRA’s definition is broad on purpose: books of account and the source documents that support them ^[1] . For a small business that means sales invoices and receipts, purchase invoices and expense receipts, bank and credit card statements, payroll records, GST/HST documentation for every input tax credit claimed, and contracts or agreements that explain the transactions. Two categories deserve flags in any retention policy: documents supporting capital property (needed to compute gains and recapture whenever the asset is eventually sold) and anything supporting a loss carryforward, which stays relevant until the loss is fully used plus the review period after that. As everywhere, the audit logic runs claim-to-document: a deduction the file cannot evidence is, for review purposes, a deduction that does not exist.

The workflow that satisfies all three rules at once

A capture-at-source pipeline answers the retention, location, and format requirements simultaneously: photograph or forward each receipt and supplier bill when it arrives, extract and code it (including the GST/HST input tax credit treatment and the recoverable/non-recoverable split provincial taxes create), and attach the image to the transaction in the accounting platform. That is the loop ExpenseFlow runs for QuickBooks Online and Xero: documents in, coded transactions with attached evidence out. Six years later, any line in any return can produce its substantiation without anyone remembering where a box went, and the records have spent the entire period in one electronically readable, properly hosted archive.