How long to keep tax records in Canada: What the CRA really expects

I have heard many opinions over the years about how long to keep tax records in Canada. Part of the problem is that different areas of the government have different guidance. So, what is the real answer to the question: how long do I keep my tax records? While many assume seven years is enough, the reality is more complex. In this video, I look at a few different cases, CRA audit periods, and even a real court case that underscores why holding onto your records — sometimes for decades — might be the smart move.

Video Transcript: How long to keep tax records in Canada

I’m frequently asked how long should we keep our tax records or financial information.

To me, this is a bit of a trick question in that different groups in the governments have different timelines.

Seven years? 10 years? 25 years?

The most common one that I see is a seven-year requirement effectively from Revenue Canada.

That said, at times Revenue Canada will allow us to go back 10 years, provided we have documentation to support what it is we’re going after.

I’m currently working on a case where I actually wish I could go back, believe it or not, about 25 years.

That’s unusual, don’t get me wrong.

A court case: How long to keep tax records in Canada

It’s also possible, and this goes back a little bit of time. But there was a court case, for example, where the taxpayer didn’t have the documentation with respect to a purchase of some machinery and equipment.

The depreciation or capital cost allowance was being challenged by Revenue Canada in a later year. And while I think that auditor must have had a bit of a mean streak in them, because they couldn’t show the original purchase price and therefore the depreciation or capital cost allowance through the years…

The capital cost allowance was denied by the judge.

So there are some things that we’re going to keep records of purchases for — major acquisitions such as pieces of real estate, larger pieces of equipment — that we’re wanting to keep for an extended period of time, really until we dispose of those assets and we’re past the audit period.

Others, we’re probably a lot safer to use the — I’d like the 10-year mark as compared to the seven.

Electronic storage and keeping tax records

Nowadays, with more and more information really being stored electronically, there’s less of an excuse to get rid of it sooner as compared to that time not that long ago where there were so many banker boxes of paperwork that it was quite a process and a warehousing task to keep everything together.

So to the degree possible, electronically keeping these records a little longer isn’t going to hurt us.

I’m George Dube, saving the world from tax, one bow tie at a time®.

For tax-saving and wealth-building tips, subscribe to my newsletter.

I want to help you do wonderful things®.

-End transcript-

Resources

For additional resources related to how to maximize tax deductions, see:

More questions?

Still have questions? I want to help you Do wonderful things®, so please contact me today.

Remember – circumstances are unique! This information is summary in nature. Seek out advice from your tax advisor about your specific situation.