• Records required by law

    It's important you keep all records related to establishing, running and selling your business. This includes one-off transactions and those that support the calculations and amounts you show in your tax return:

    • for five years after they are prepared, obtained or the transactions completed, whichever occurs last
    • in English, or in a form that we can access and easily convert.

    You will have to keep records for longer if you use information from them in a later tax return. For example, if you claim a loss carried forward from a business activity in an earlier year, the records used to work out the loss must be kept until the later return's period of review has ended (the period in which an assessment can be amended).

    You may also need to keep records for longer that relate to:

    • assets for capital gains tax purposes
    • correcting a mistake or amending a return.

    We've provided examples and tips to help you understand what you need to know and do, and what records you need to keep.

    Other regulatory bodies may have different record keeping requirements from ours. For example, the Australian Securities & Investments Commission (ASIC) requires companies to keep records for seven years. We recommend you check the record keeping requirements of all bodies that you have dealings with.

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    Keep records of cash transactions

    Some businesses deliberately hide income to avoid paying the right amount of tax and superannuation. They usually do this by not recording or reporting all their cash or electronic transactions.

    This is called the cash and hidden economy and it's unfair to everyone doing the right thing.

    Our primary objective is to promote fair competition in business and reduce the unfair advantage some businesses have when they don't correctly record or report all their income and expenses.

    Penalties can be applied if you are engaging in cash and hidden economy activities, such as operating off-the-books and failing to report cash transactions.

    We support businesses that want to do the right thing. If you are unsure what activities are considered part of the cash and hidden economy, or want to find out more, access the cash and hidden economy information on our website.

    Our approach to record keeping and penalties

    Our emphasis is on improving record keeping practices through help and education.

    You can:

    • contact us between 8.00am and 6.00pm, Monday to Friday for additional assistance
    • discuss your record keeping practices with our field officers if they come to visit you.

    Find out about:

    We will generally give you an opportunity to improve your record keeping before we consider applying a penalty. However, in cases of deliberate non-compliance with tax laws, we may apply a penalty in the first instance.

    Your circumstances and behaviour will be taken into consideration when we apply a penalty so ensure you discuss these with us.

    See also:

    Next step:

    Last modified: 09 Feb 2017QC 51099