{"id":53303,"date":"2026-07-22T14:19:02","date_gmt":"2026-07-22T18:19:02","guid":{"rendered":"https:\/\/www.millerthomson.com\/?p=53303"},"modified":"2026-07-22T14:19:06","modified_gmt":"2026-07-22T18:19:06","slug":"keeping-adequate-books-and-records-important-reminders-for-canadian-registered-charities","status":"publish","type":"post","link":"https:\/\/www.millerthomson.com\/en\/insights\/social-impact\/keeping-adequate-books-and-records-important-reminders-for-canadian-registered-charities\/","title":{"rendered":"Keeping adequate books and records: Important reminders for Canadian registered charities"},"content":{"rendered":"\n

Books and records. They are not the most exhilarating three words, but charities neglect them at their peril.<\/p>\n\n\n\n

Keeping adequate books and records helps the Canada Revenue Agency determine whether a charity is fulfilling its responsibilities under the Income Tax Act (Canada) <\/em>(the \u201cAct<\/strong>\u201d). Failing to keep adequate books and records is often grounds for revocation.<\/p>\n\n\n\n

Charities need to be careful and ensure that their directors, officers, employees, and volunteers understand the Act\u2019s books and records requirements, and are following the proper procedures for retaining records.<\/p>\n\n\n\n

Moreover, with charities increasingly depending on electronic systems and third-party platforms to support their operations and fundraising activities, charities must ensure that compliance with the Act\u2019s record-keeping rules is also integrated into the organization\u2019s processes. <\/strong>This is particularly important for charities using cloud-based accounting software, donor management platforms, or international service providers, where server location may not be obvious and may not be Canada.<\/p>\n\n\n\n

Where must my charity keep its books and records?<\/h2>\n\n\n\n

Subsection 230(2) of the Act requires every registered charity to maintain its books and records at an address in Canada \u201cthat is recorded with or designated by the Minister of National Revenue.\u201d<\/p>\n\n\n\n

Put simply, books and records must be kept at the Canadian address that is on file with the CRA. This includes records relating to activities that the charity carries on outside Canada.  <\/p>\n\n\n\n

Books and records should be kept in either English or French.  If records were originally created in a different language, a translated version in either of Canada\u2019s official languages must be available.<\/p>\n\n\n\n

What do the rules say about electronic records and server location?<\/h2>\n\n\n\n

The requirement to maintain books and records applies equally to records maintained in electronic form.  Electronic records must be retained in an electronically readable format for the applicable retention period.<\/p>\n\n\n\n

Records may be stored electronically and accessed remotely.  However, books and records maintained on a server located outside of Canada do not satisfy the requirement to keep books and records in Canada<\/em>.  <\/p>\n\n\n\n

Server location is an important and often overlooked consideration, particularly for charities that work with foreign affiliates, engage non-Canadian entities to provide administrative or bookkeeping services, or rely on cloud-based storage solutions to maintain their records.<\/p>\n\n\n\n

Practical tip:<\/strong> Many widely used cloud platforms, including popular accounting software, donor management tools, and document storage services, default to servers located in the United States or other jurisdictions. A charity using these platforms should confirm with its provider that Canadian data residency options are available and activated. Simply using a Canadian-facing version of a platform is not sufficient if the underlying data is stored on servers outside Canada.<\/p>\n\n\n\n

Accordingly, a Canadian registered charity must ensure that:<\/p>\n\n\n\n