Maintaing Documentation
CRA requires every business to maintain all their invoices and receipts for at least six years from the end of the tax year. In practice, accountants recommend that you retain your documents for at least seven years. You can retain it in either hardcopy or electronic format. CRA audits can happen at any time. It is very important for you to remember that if you are registered as GST vendor, then you are required by law to file a GST return even if your business makes zero dollars in sales revenue.
Penalties
If you file tax returns late or do not pay your taxes on time or worse yet, you evade tax in Canada, you can face fines and penalties that are determined at CRA’s discretion. My recommendation to you is to always file your tax returns and pay your tax liabilities before the due date.
Closing Your GST Account
Let us assume that you reach a point where you no longer want the business. For example, you decide to sell the business, retire, you may die or the business is no longer making profits and you want to wind it down. It is the responsibility of the business owner to contact CRA and close the GST account. If you do not close your GST account after you stop doing business, then CRA will still expect you to file GST returns. And you will be slapped with penalties for late filing on top of that.
