How Far Back Can the CRA Audit You?
If you run a small business in Canada, you’ve probably wondered: “How far back can CRA actually go if they decide to audit me?”
The short answer: for most individuals and small corporations, it’s three years. But there are important exceptions where the Canada Revenue Agency (CRA) can go much further back.
This post breaks it down in simple terms, so you know what’s realistic and what’s a “worst-case scenario.”
Friendly disclaimer: This is general information, not legal or tax advice. For specific situations, talk to a CPA or tax lawyer.
Audit vs. Reassessment: What’s the Difference?
When people say “CRA audit,” they’re usually talking about CRA reviewing your books and records and then possibly reassessing your tax return.
An audit is the review process.
A reassessment is when the CRA officially changes your tax return (more tax, less tax, or no change at all).
How Long Can CRA Reassess Your Income Tax Return?
Canadian tax law sets a “normal reassessment period” under the Income Tax Act, which is basically the standard time window CRA has to change a previously assessed return.
For most individuals and small businesses, it looks like this:
Individual T1 returns = 3 years from the date on your Notice of Assessment (NOA)
Canadian-controlled private corporations (CCPCs) = 3 years from the NOA date
Other corporations (non-CCPC) = 4 years from the NOA date
Example
Your 2024 personal or corporate return is assessed on June 30, 2025.
Under normal rules, CRA can reassess until June 30, 2028 (3 years), or June 30, 2029 for a non-CCPC.
After that point, that year is considered “statute-barred”, basically closed to further reassessment in most cases.
When Can the CRA Go Back Further Than 3–4 Years?
Here’s the part that worries people: there is no absolute time limit if the CRA believes there was misrepresentation of facts on the return, due to neglect, carelessness, willful default, or fraud.
In those cases, CRA can reassess beyond the normal period, if they can justify it under the law.
How Far Back Can the CRA Audit GST/HST?
Income tax and GST/HST are governed by different laws. For GST/HST, CRA can generally reassess up to four years from when the GST/HST became payable or the return was due. Just like income tax, if there’s misrepresentation, neglect, or fraud, CRA can reassess at any time; there’s no fixed limit.
How Long Should You Keep Your Records?
In most cases, CRA expects you to keep your books and supporting documents for at least six years from the end of the tax year they relate to. In practice, it’s often worth keeping digital copies even longer for big items like vehicles, equipment, and property.
How Good Bookkeeping Reduces Audit Stress
You can’t fully control whether CRA selects you for a review or audit, but you can control how stressful that process would be.
Solid bookkeeping helps because:
Your income and expenses are clearly documented
You can quickly find supporting documents for any questioned transaction
Your returns are more likely to be accurate in the first place, reducing audit risk
From my years working at CRA, the biggest pain point I saw usually wasn’t the audit itself, it was the daunting task of trying to rebuild two or three years of records in a hurry because nothing was organized upfront.
Need Help Getting (or Staying) Audit-Ready?
If you’re a Canadian small business owner and you’re feeling unsure about how “audit-ready” your books are, I can help you:
Get your books cleaned up and organized
Set up simple systems so records are stored properly going forward
If you’d like to feel calmer about the idea of a CRA review, book a free 30-minute consultation and we’ll talk through where you’re at and what would make things easier at tax time.