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What are records and who has to keep them?

We recently had to deal with the issue of how to deal with financial records when the business has ceased and its owner left the country. Disposing of the old records once a company is no longer in business is not as easy as one might think since CRA has the right to review those long after the business has stopped. This blog will list financial records that CRA requires to be kept and by whom. Next one will discuss where they should be kept, in what form and for how long. 

What are records?

Records are organized accounting and financial documents that summarize your transactions and include the documents to support these transactions. These documents include:

  • ledgers
  • journals
  • books
  • charts
  • tables
  • financial statements
  • statements of accounts
  • income tax returns
  • goods and services tax/harmonized sales tax (GST/HST) returns
  • excise tax returns
  • sales invoices
  • purchase receipts
  • vouchers
  • contracts
  • guarantees
  • bank deposit slips
  • bank statements
  • cancelled cheques
  • cash register slips
  • credit card receipts
  • work orders
  • delivery slips
  • working papers
  • logbooks
  • emails
  • all correspondence that support your transactions

Who has to keep records?

Here is the list of those who by law have to keep records:

  • persons who have to file a tax return
  • persons carrying on a business or engaged in commercial activity
  • persons who have to pay or collect taxes or other amounts such as payroll deductions and softwood lumber products export charge
  • persons who have to file a goods and services tax/harmonized sales tax (GST/HST) return
  • persons who apply for GST/HST refunds or rebates
  • payroll service providers
  • third-party record keepers
  • trusts
  • non-profit organizations
  • registered agents of registered political parties
  • official agents for candidates in a federal election
  • universities
  • colleges
  • municipal corporations
  • hospitals
  • school authorities
  • qualified donees such as:
    • registered charities
    • registered Canadian amateur athletic associations
    • registered housing corporations resident in Canada that are exempt from tax under Part 1 of the Income Tax Act because of paragraph 149(1)(i)
    • registered municipalities in Canada
    • registered municipal or public bodies performing a function of government of Canada
    • registered university outside Canada that is prescribed to be a university, the student body of which ordinarily includes students from Canada
    • registered charitable organizations outside Canada to which Her Majesty in right of Canada has made a gift

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