Most Canadian tax returns can be reassessed for three years after the Canada Revenue Agency (CRA) sends the original notice of assessment, but that period stretches when certain facts are present. For business owners, the difference between a closed tax year and an open one can decide whether a sale proceeds smoothly, whether a reorganization holds up, and how much exposure sits on the balance sheet.
For individuals and Canadian-controlled private corporations, the CRA can generally reassess within three years of the original notice of assessment, other corporations face four years, and the CRA can go back indefinitely where a return contains a misrepresentation caused by neglect, carelessness, wilful default, or fraud. Several extended periods, such as foreign reporting and loss carrybacks, add further years to that baseline.
If you are asking how far back can CRA audit your business, the precise answer turns on your entity type, your assessment dates, and the history behind each filing. At Beganyi Professional Corporation, we combine corporate, tax, and M&A advice for Ontario owners, so we see how these deadlines shape transactions and succession plans.
If a CRA letter or an old filing concern is on your desk, you can reach us at +1 647-977-7749 or through our contact page to arrange a confidential consultation, including remote meetings anywhere in Ontario.
Key Takeaways
- The reassessment clock starts on the date the CRA sends your original notice of assessment.
- Misrepresentation, waivers, foreign reporting gaps, and unfiled returns keep older years open.
- Records supporting share cost and reorganizations belong in permanent storage.
When Does the Normal Reassessment Period End?
The normal reassessment period ends three or four years after the CRA sends the original notice of assessment, depending on who filed the return. Individuals and Canadian-controlled private corporations (CCPCs) get the shorter window, other corporations get the longer one, and GST/HST runs on its own separate timetable.
Why an Audit and a Reassessment Are Different
An audit is the CRA's examination of your books, returns, and supporting documents. A reassessment is the formal notice that changes the tax, interest, or penalties owing for a year.
The time limits in the Income Tax Act restrict when the CRA can issue a reassessment. The CRA can review an older year, but once that year is statute-barred, it cannot change the tax payable unless an exception applies.
This distinction matters in practice. Auditors sometimes request records from closed years to trace opening balances or confirm the cost of an asset, even when they cannot reassess those years directly.
Three Years for Individuals and CCPCs
For individuals, most trusts, and corporations that were CCPCs at the end of the tax year, the normal reassessment period ends three years after the earlier of two dates:
- the day the CRA sent the notice of original assessment, or
- the day it sent an original notification that no tax was payable.
Most owner-managed Ontario businesses are CCPCs, so the three-year rule covers the majority of corporate tax returns we review. Status is tested at year end, so a change in control during the year can move a corporation into the four-year category for that year.
Four Years for Other Corporations
Corporations that were not CCPCs at the end of the year, along with mutual fund trusts, face a four-year normal reassessment period. Public corporations and private companies controlled by non-residents fall into this group.
This becomes relevant after an acquisition. If a foreign buyer or a public company acquires control of your corporation, the target's years after closing will carry the longer window.
Taxpayer type | Normal reassessment period |
|---|---|
Individuals | 3 years |
CCPCs | 3 years |
Non-CCPC corporations | 4 years |
Mutual fund trusts | 4 years |
How Your Original Notice of Assessment Starts the Clock
The clock starts on the date printed on your original notice of assessment (NOA), not on your filing date or your year end. A return filed in June might be assessed weeks later, and that later date controls.
Later notices of reassessment do not restart the period for the year. Keep every original NOA in your permanent records, because calculating the expiry date requires that exact date.
Why GST/HST Generally Follows a Separate Four-Year Rule
A GST/HST audit operates under the Excise Tax Act, which generally allows the CRA four years from the later of the return's due date or its filing date to assess a reporting period. Each reporting period has its own deadline, so monthly and quarterly filers have many separate clocks running.
The CRA uses Form GST145 for waivers of the GST/HST limitation period. A business can have a closed income tax year alongside an open GST/HST period covering the same months.
When Can CRA Reassess Older Tax Years?
The CRA can reassess beyond the normal period when a return contains a careless or fraudulent misrepresentation, when certain foreign or non-resident items are involved, when you signed a waiver, or when no return was filed. Each exception has its own scope, and most only open the specific issue in question.
Misrepresentation, Neglect, Carelessness, Wilful Default, and Fraud
A misrepresentation attributable to neglect, carelessness, wilful default, or fraud allows the CRA to reassess at any time. Unreported income is the most common trigger we see, followed by personal expenses run through a corporation.
The CRA carries the burden of proving the misrepresentation for a statute-barred year. The reassessment is also limited to amounts reasonably related to that misrepresentation, so one careless error does not reopen every line of the return.
An honest, reasonable filing position that later proves wrong generally falls outside this exception. Documenting the reasoning and advice behind a position at the time you file strengthens that argument years later.
When Foreign Reporting and Non-Resident Transactions Extend Deadlines
Three extra years are added to the normal period in several cross-border situations:
- transactions with a non-arm's length non-resident person
- income, losses, or other amounts relating to a foreign affiliate
- payments or refunds of foreign income or profits tax
- application of the non-resident trust and foreign investment entity rules
Foreign property reporting carries its own extension. Where you failed to report income from specified foreign property and also did not file Form T1135 on time, or filed it with a false statement or omission, the period extends by three years. Unreported dispositions of real estate held as capital property can also be reassessed at any time for amounts related to that sale.
How Loss Carrybacks and Reassessment Waivers Affect the Timeline
Carrying back a loss or credit from a later year to an earlier one extends the reassessment period for the earlier year by three years. The extension lets the CRA review the carryback and related consequences.
A waiver (Form T2029) authorizes the CRA to reassess specified matters after the normal period. It must be filed before that period expires, and a waiver included with the original return is not valid.
Auditors sometimes ask for a waiver when they need more time. Before signing, narrow the description of matters to the specific issues under review. You can revoke a waiver with Form T652, which takes effect six months after filing.
Why Unfiled Returns May Leave Older Years Open
No assessment means no clock. Without an original NOA, the normal reassessment period never begins, so a year with no return stays open indefinitely.
The CRA can also assess a non-filer directly under subsection 152(7), estimating income and business expenses without voluntary deductions. If you file after that, the CRA reviews your return and issues a reassessment.
How Long Should Business Owners Keep Tax Records?
Business owners must keep tax records for six years from the end of the last tax year they relate to, and several situations require longer retention. Your record-keeping requirements stay with you even when a bookkeeper or accountant holds the files.
The Six-Year Retention Rule and Late-Filed Returns
The six-year period runs from the end of the tax year the records relate to. For corporations, that is the fiscal period; for individuals, the calendar year.
If you file a return late, the six years run from the date you file it. Records must be kept at your Canadian residence or place of business unless the CRA approves another location, and you need written permission (Form T137) to destroy records early.
Electronic records count. Accounting software files, point-of-sale data, and tax preparation files all need to be preserved in a readable format.
Keeping Records Longer for Audits, Objections, and Appeals
If you file an objection or appeal, keep all relevant records until the latest of these dates:
- the date the dispute is resolved
- the date for filing any further appeal passes
- the end of the six-year period
A CRA official can also direct you to keep records longer, either in person or by registered mail. After an amalgamation, the new corporation must keep each predecessor's records for six years from the end of the related tax year, which is a frequent gap we flag in post-closing integration.
Preserving Share Cost, Capital Gains, and Reorganization Documents
Records about long-term property acquisitions, the share registry, and historical information affecting a sale or wind-up must be kept indefinitely. These documents establish adjusted cost base, paid-up capital, and the history needed to calculate capital gains decades later.
For owners planning a sale, these files support claims such as the lifetime capital gains exemption, which depends on holding-period and asset tests reaching back years. Election forms and valuations from a Section 85 rollover belong in permanent storage alongside your minute book.
We regularly see buyers' due diligence teams request articles of reorganization, rollover elections, and share subscription records. Missing documents slow negotiations and invite price adjustments.
What Should You Do About an Audit Letter or Past Filing Error?
Start by identifying which years the CRA is reviewing and whether each one is still within its normal reassessment period. From there, organize your response with your advisors and decide whether a voluntary disclosure fits your situation.
Confirm the Tax Years, Deadlines, and Basis for Reviewing Older Returns
List each year referenced in the letter, find the original NOA date for each, and calculate the expiry of the normal period. For any year outside that window, the CRA needs a legal basis to reassess.
Ask the auditor which exception they rely on if older years are included. A request for a waiver is a signal that a deadline is approaching; it deserves careful review before you sign anything.
Coordinate Records and Responses With Your Accountant and Legal Advisor
Your accountant knows the numbers, and your legal advisor assesses the exposure and protects your position. Responding with a single coordinated voice avoids inconsistent explanations that auditors later treat as admissions.
Provide what is requested, in an organized form, within the stated deadline. Ignoring a requirement for information can lead to penalties and compliance orders, and contesting one in court stops the reassessment clock for the period of the dispute.
Assess Whether the Voluntary Disclosures Program Is Available
The Voluntary Disclosures Program (VDP) lets taxpayers correct errors or omissions in exchange for relief from prosecution and some penalties and interest. Since October 1, 2025, unprompted applications normally receive 75% interest relief and 100% penalty relief, while prompted applications receive 25% interest relief and up to 100% penalty relief.
Eligibility requires five conditions, including applying before an audit or investigation starts on the disclosed issue. Applications must include supporting documents covering:
- the last ten years for foreign-sourced income or assets
- the last six years for Canadian-sourced income or assets
- the last four years for GST/HST
An education letter from the CRA no longer disqualifies you, but an audit already underway on the issue does.
How Beganyi Professional Corporation Connects Tax Advice With Business Planning
Open tax years affect much more than an audit. They influence purchase price, indemnities, and escrow in a sale, which is why tax planning for business sales should start with a review of filing history.
Our integrated tax and legal strategy brings corporate records, reorganizations, and tax positions together under senior-lawyer review. Principal lawyer Ladislav Beganyi holds a Master of Taxation from the University of Waterloo and completes more than 20 commercial transactions each year, and we work alongside your accountant on every file.
Confirm Your Deadlines Before Making Your Next Business Move
Knowing which tax years remain open gives you a clear picture of your exposure before a sale, reorganization, or succession step. The normal reassessment period is three years for individuals and CCPCs and four years for other corporations, measured from the original notice of assessment.
Older years reopen in specific circumstances: careless or fraudulent misrepresentation, foreign reporting gaps, loss carrybacks, waivers, and unfiled returns. Each exception carries its own scope.
Practical steps for tax compliance:
- record the original NOA date for every year
- keep records for at least six years, and permanently for share and reorganization files
- review any waiver request before signing
- consider the VDP before an audit begins
If your structure includes a holding company, track each entity's deadlines separately, since every corporation has its own assessment history.
Frequently Asked Questions
Can CRA reassess a return more than seven years old?
Yes, in certain cases. The CRA can reassess at any time for misrepresentation caused by neglect, carelessness, wilful default, or fraud, for matters covered by a waiver, or where no return was filed.
Extended periods for foreign items can also push the window well past the normal three or four years.
Does an audit started before the deadline let CRA reassess afterward?
No, starting an audit does not stop the clock on its own. The CRA must issue the reassessment before the period expires unless an exception applies, which is why auditors sometimes request a waiver.
Contesting a requirement for information in court does pause the period.
Does unreported income automatically give CRA unlimited time?
No. The CRA must show that the omission was a misrepresentation attributable to neglect, carelessness, wilful default, or fraud.
Any reassessment of a statute-barred year is limited to amounts related to that misrepresentation.
Does the ten-year taxpayer relief window apply to corporations?
Partly. The ten-year window for refund or tax-reduction reassessments of statute-barred years is available only to individuals (other than trusts) and graduated rate estates.
Corporations can still request cancellation of penalties and interest within the ten-year limitation period.
Does selling my business end CRA's ability to reassess earlier years?
No. In a share sale, the corporation's open years remain exposed after closing, which is why buyers negotiate tax indemnities and holdbacks. In an asset sale, the selling corporation keeps its own reassessment exposure for its corporate tax returns.