CANADA: What Books and Records Must be Kept by an Individual or a Business?

The records that must be kept include books of accounts and records which provide the ability to calculate taxes payable. Books and records must be supported by "source documents" which substantiate the amounts in the books of account. Canada Revenue Agency (CRA) indicates that supporting documents for the income tax return of an individual should be kept for six years, in case they select your return for a review. They may request more documentation than official receipts as proof of deductions or credits claimed, including canceled cheques or bank statements.

Source documents include (but are not limited to) invoices for purchases and sales, deposit slips, cheques, contracts, and trade confirmations for investment purchases and sales. These books and records are used to prepare financial statements of the business, which previously had to be prepared according to generally accepted accounting principles (GAAP).

Comments 0