Books and records kept out­side of Canada

Asian Journal - - WORLD -

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:

• A 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 ex­pense in­curred by CRA to per­form an on­site 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.

An­gela Hard­bat­tle, Dipl. T (Hons), CPA, CA, Man­ager

Man­ager,

Group CPA’S Gil­mour Email: faqs@gil­mour.ca

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