Record retention
The rules for how long a business must keep its financial records, and in what form, before it can destroy them.
In short
- In Canada, the CRA and Revenu Québec generally require records to be kept for six years from the end of the tax year they relate to.
- Electronic copies are accepted if they are complete, readable and retrievable.
- The period can be longer: for example, while an assessment is under objection or appeal.
Record retention covers how long financial documents must be kept and how. It applies to receipts, invoices, bank statements, contracts, payroll records and the books themselves, including the software files and data that produced them.
How long
- Canada: the CRA generally requires records to be kept for six years from the end of the last tax year they relate to. Revenu Québec applies a similar six-year rule.
- United States: the IRS generally asks for three years from filing, longer in specific cases such as six years if income was substantially underreported, or seven for losses from bad debts.
- United Kingdom: companies generally keep records for six years from the end of the financial year.
Records tied to a dispute, an objection or an appeal must be kept until it is resolved, even if that runs past the normal period.
Paper, scans and data
Tax authorities accept electronic records, including scanned paper, provided the copy is complete and legible, and the records can be produced on request. That last part catches people out: records stored in a system the business no longer pays for, or in a format nobody can open, may not count as kept at all.
Worked example
When a 2025 receipt can be shredded
A Canadian company with a December 31 year end buys office chairs in March 2025. The purchase relates to the 2025 tax year, which ends December 31, 2025. Six years from then is December 31, 2031. The receipt, or a clear digital copy of it, must be kept at least until then, and longer if the 2025 return is under objection.