Books and Records Kept Outside of Canada

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Books and Records Kept Outside of Canada

October 2, 2018

Tax Question:

Is a non-resident corporation that is registered for a Goods and Services Tax/Harmonized Sales Tax (GST/HST) account with the Canada Revenue Agency (CRA) required to keep records and books of account in Canada?

Facts:

The Canadian Income Tax Act (ITA) requires everyone who registers for a GST/HST account to keep records and books of account in Canada in either English or French. However, CRA does allow the books and records to be kept outside of Canada in some circumstances.

Discussion:

In order to apply for permission to maintain the company records outside of Canada, an authorized representative of the company must make a written request. The written request must include:

Clear identification of the books, records, or other documents requested to be maintained outside of Canada;
The complete address of the location where the records are requested to be maintained;
A signed undertaking by the person making the request that they will be responsible for ensuring that any books and records maintained outside Canada will be made available within 30 days for review or audit by CRA officials upon request;
Details of any circumstances that would justify maintaining the books and records at a location outside Canada; and
Any other information considered pertinent to the request.

CRA has a standard request form that they provide to new non-resident GST/HST registrants to complete for review. If granted permission and the books and records are not made available when requested by CRA, the company will have to pay the travel and living expenses incurred by CRA to perform an on-site inspection. All books and records of account have to be kept for a minimum of six years from the end of the calendar year to which they relate to. If you want to destroy them before the six-year time limit, you are required to get written permission from CRA.

If you would like more information on this topic, please contact a member of the Empire CPA team by filling out the contact form below.

Canadian and foreign tax laws are complex and have a tendency to change on a frequent basis. As such, the content published above is believed to be accurate as of the date of this post. Before implementing any tax planning, please seek professional advice from a qualified tax professional. Empire, Chartered Professional Accountants will not accept any liability for any tax ramifications that may result from acting based on the information contained above.