Retention periods

Mandatory retention periods for (financial) records?

Your activities are expanding, and so is your administration. Time to tidy up by putting some documents through the shredder! But is that really wise? You should not take the destruction of business documents lightly … Every business owner and every company is bound by certain mandatory retention periods for documents. The government distinguishes between a number of types of documents.

Tax documents

You must keep a copy of the tax return for at least 7 years, or more precisely: until the end of the seventh year following the taxable period. These documents are necessary in the event of an audit of corporate income tax or VAT. Many documents serve as evidence for the return, such as:

• payslips
• the account statements of the accounts
• invoices
• certificates
• bank statements and documents

Invoices, credit documents, governance documents, …

Invoices are essential in dealings with the VAT authorities, but also as proof that you have paid for – deductible expenses – or supplied a certain product or service, for example as proof that a customer still owes you money. Depending on the administrative area, the government applies different retention periods:

• the complete accounts, such as the purchase journal and the inventory book with all supporting documents: 7 years following the taxable period to which they relate. The seven-year period starts from the closing of the financial year. Usually there are no longer any physical “books”, so understand the purchase journal as the purchase ledger (the purchase accounts).
• tax documents supporting the corporate tax return: must also be kept for 7 years.
• the VAT authorities also require a retention period of 7 years.
• note: for specific transactions the retention period is longer, for example 15 years for real estate. For capital goods, you keep the invoices until 7 years after the end of the depreciation period.
• policy and governance documents such as minutes of the General Meeting or the Board of Directors must remain available permanently. Do not destroy them!

How to keep them?

You choose how you keep your administration and these documents. This can be on paper or digitally. If you work with a digital system, you often have everything quickly to hand in the event of an audit. But be careful: the authorities can demand the original documents for inspection. So don't throw invoices away! Also be aware that, as a taxpayer, you must ensure that digital information remains accessible at the registered office. Expired software licences or a change of software supplier are your decisions, but can never serve as an excuse for not providing the data during an audit.