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Tax

How long to keep business records, and where.

Every New Zealand business accumulates records: invoices, bank statements, payroll, contracts, board minutes. Knowing how long to keep them, and in what form, matters when Inland Revenue asks for something years later, or when a buyer wants to see your history.

This guide summarises what Inland Revenue and the Companies Office say, explains a point about offshore storage that many businesses miss, and sets out where a data room fits. It is a summary, not tax advice; check with Inland Revenue or your adviser for your situation.

The seven-year rule for business records

Inland Revenue says to keep all your records, including those in electronic form, for at least seven tax years. That covers the records behind your income tax and other tax returns: sales and purchases, bank statements, invoices, receipts, wage records and the like.

Inland Revenue also says records must be in English or Māori unless you have its approval to use another language, and that if you keep records on a computer, you need to store them in a format it can use. Some situations call for records to be kept longer, so if you are in any doubt, check before you dispose of anything.

Company records

Companies have further obligations. The Companies Office says companies must keep records including board and committee minutes, shareholder communications, resolutions, director certificates and financial statements for seven years.

It also says a company must maintain a share register recording the shares issued, an alphabetical list of shareholders with their addresses, how many shares each holds and any restrictions on transfer, and keep a record for the last ten years of its shareholders and of share repurchases, redemptions and transfers. These are exactly the records a buyer or investor will ask to see.

The offshore storage question

This is the point many businesses miss. Inland Revenue says that if you store your records off-shore, including through cloud computing, you should make sure either you or your cloud service provider has its approval.

Inland Revenue publishes a list of third-party providers it has approved to store taxpayers' electronic records offshore. Its guidance says those approvals come with conditions, such as the records remaining accessible to Inland Revenue, and that taxpayers remain responsible for their tax obligations even when a third party stores their records.

Many popular accounting and storage services run outside New Zealand, so this is worth checking for every system where your records live. Ask your provider whether it has Inland Revenue's approval, and talk to your adviser if you are unsure.

Where a data room fits, and where it does not

It helps to separate two jobs: keeping your records, and sharing them.

Keeping records is the job of your accounting system and your record-keeping arrangements. That is where the seven-year rule and the offshore approval question apply most directly, and where you should be confident of the answer.

Sharing records is a different job. When Inland Revenue asks for documents in a review, when a buyer runs due diligence, or when you move to a new accountant, you need to give the right people controlled access to a set of copies, and keep track of what they saw. That is what a data room is for. ShareAndGo is a tool for sharing, not a substitute for your record-keeping system, and it is not on Inland Revenue's list of approved offshore storage providers.

Used for sharing, a data room helps in several ways:

  • A request list with a tax template tracks what has been asked for and what has been provided.
  • Each person sees only the folders you allow, and view-only recipients see watermarked documents rendered on our side rather than receiving the files.
  • The audit log records who viewed and downloaded each document.
  • When the review is over, you can revoke access and export the room as a ZIP with an index of every document.

Privacy and retention

Business records often contain personal information about staff, customers and suppliers. The Privacy Act's principle 9 says an agency must not keep personal information for longer than is required for the purposes for which it may lawfully be used. A legitimate reason to keep records, such as Inland Revenue's seven-year rule, is one such purpose. Holding personal information long after every purpose has passed is not.

A short retention approach, written down, helps balance the two: what you keep, why, for how long, and how you dispose of it safely when the time comes.

A practical checklist

  • Keep business records, including electronic ones, for at least seven tax years.
  • Keep company minutes, resolutions and financial statements for seven years, and share history for ten.
  • Check whether any system that stores your records offshore has Inland Revenue's approval, or whether you need it yourself.
  • Keep records in a format Inland Revenue can use, in English or Māori unless approved otherwise.
  • Use a controlled sharing tool when records need to be seen by someone outside the business.
  • Dispose of personal information safely once you no longer need it.

Questions people ask

How long should I keep business records in New Zealand?
Inland Revenue says to keep all records, including electronic ones, for at least seven tax years. Company records have their own periods, set out by the Companies Office.
Can I keep my records in the cloud?
Inland Revenue says that if you store records off-shore, including through cloud computing, either you or your cloud service provider needs its approval. Check with your provider and your adviser.
Where does ShareAndGo store documents?
Your documents are stored in Sydney, Australia. ShareAndGo is designed for sharing documents, not as your record-keeping system.
Should I delete records after seven years?
Not automatically. Some records need to be kept longer, and the Companies Office sets a ten-year period for share history. Once every purpose has passed, the Privacy Act expects personal information not to be kept longer than necessary.

Related reading

Data rooms for Inland Revenue reviews

Gather, share and track the documents an Inland Revenue review asks for.

An end of tax year data check

A five-part tidy-up for accounting practices.

A capital raising data room checklist

The company records investors expect to find.