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Destruction of Books and Records For My Company

August 13, 2012

Tax Question:

When can I destroy all my old books and records from my company?

Facts:

Under the Income Tax Act; books, records, and their related accounts and source documents have to be kept for a minimum of six years from the end of the last tax year to which they relate. The tax year is the fiscal period for corporations and the calendar year for all other taxpayers. Under the Employment Insurance Act and Canada Pension Plan, the retention period begins at the end of the calendar year to which the books and records relate.

Discussion:

The above fact is the standard answer to this question, however, there are some exceptions to this rule.

  • For a corporation, records can be destroyed two years from the date of the dissolution of the corporation.
  • Books and records may be destroyed at an earlier time if the Minister of National Revenue gives written permission for their disposal.
  • If a return required by Section 150 of the Act is filed late, the books and records must be kept for six years from the day the return is filed.
  • Every book and record necessary for dealing with a notice of objection or appeal must be kept until the notice of objection or appeal is disposed of and the time for filing any further appeal has expired.
  • Any documentation that relates to assets of the company that are still held by the company and have not been disposed of must be kept until the asset is disposed of.
 

This is not a complete list. To refer to a complete listing please visit the CRA website and search for Information Circular IC78-10R5.

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.

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