How long to keep tax records NZ—it’s a question that pops up every tax season, and yet most Kiwis aren’t 100% sure of the rules. Whether you’re running a business, managing a rental property, or just trying to stay on top of your income tax record keeping NZ, knowing the exact retention period is essential. Get it wrong, and you could face IRD penalties or lose out on valuable deductions.
In this article, we’ll break down how long to keep tax records NZ in simple terms. You’ll learn what the IRD record retention rules say, what documents you actually need to keep (and which ones you can ditch), and how long different types of taxpayers—like individuals, sole traders, or companies—should hold onto things. We’ll also cover how to store your documents properly, including the shift toward digital systems and audit-proof tax records.
Whether you’ve been keeping a shoebox full of receipts or you’re already using cloud software, this guide will help you stay 100% compliant and avoid nasty surprises. Let’s clear the confusion around tax records for small business NZ and personal taxpayers once and for all.
Why keeping tax records matters in New Zealand
Before looking at how long to keep your tax records, it’s important to understand why it matters. The IRD doesn’t just want you to hold onto paperwork for fun—it’s a legal requirement designed to protect both taxpayers and the government.
Keeping the right records helps:
- Prove your income and expenses during an IRD audit
- Justify deductions and GST refunds you claim
- Avoid penalties, interest, and backdated tax bills
How long to keep tax records NZ – The general rule
Now to the heart of the matter: how long to keep tax records NZ depends on your situation, but the default answer is 7 years. This applies whether you’re an individual, sole trader, or company.
Individuals and sole traders
If you’re an employee, self-employed, or a freelancer, the IRD expects you to keep tax records for at least 7 years after the end of the tax year.
This includes:
- Receipts for deductible expenses
- Bank statements
- Evidence of income (e.g. invoices, contracts)
Need help with your annual return? Here’s what you should know about the cost of hiring a personal tax accountant.
Companies and trusts
Registered companies and trusts must also keep tax records for 7 years, but there are additional documents you must hold on to for longer—like the company constitution or shareholder register.
Essential company records to retain:
- Share register and director resolutions
- Financial statements and annual returns
- Company income and expenditure
If you’re not sure what records apply to your structure, we recommend you find an accountant for your small business.
Exceptions and special cases
There are a few cases where the 7-year rule doesn’t apply, including:
- If your tax return was filed late (keep records 7 years from that date)
- If you’re involved in a dispute with the IRD
- If your business is in liquidation or receivership
TABLE: Tax record retention periods in NZ
| Type of taxpayer | Minimum retention period | Notes and exceptions |
|---|---|---|
| Individuals / sole traders | 7 years | From end of tax year filed |
| Companies | 7 years (some indefinitely) | Share register must be kept permanently |
| GST-registered entities | 7 years | Includes tax invoices and adjustment calculations |
| Late filers / Disputes | More than 7 years | Start count from date of filing or resolution |
What types of tax records should you keep?
Not every scrap of paper matters, but the IRD does expect you to hold on to specific types of records. If it proves income or expenses, keep it.
Here’s what you need to keep:
- Invoices and receipts
- Wage, PAYE and salary records
- Contracts, quotes, and purchase orders
- Credit card and bank statements
- GST returns and supporting calculations
- Asset purchase and depreciation schedules
- Rental income records (if you own property)
Also make sure to keep email confirmations and digital files if your business operates online.
Digital vs paper records: what the IRD accepts
The IRD allows you to store records digitally or on paper—but they must be easily retrievable and readable. If you scan everything into the cloud, that’s fine. If you keep paper folders, that’s fine too.
Digital storage tips
Digital records are easier to manage, especially if you use software like Xero or MYOB. Just make sure to:
- Use secure cloud storage with backup (like Google Drive or Dropbox)
- Save documents in accessible formats (e.g. PDF, Excel)
- Maintain a clear folder structure by tax year
Paper records still allowed?
Yes. Paper is still accepted, but make sure:
- Documents are stored in a dry, secure location
- You don’t lose them to floods, fire, or moving houses
- You’re ready to scan them if requested by IRD
What happens if you don’t keep your tax records?
Let’s say you tossed out your receipts after 2 years. What could go wrong? A lot, actually.
Failing to keep records puts you at risk of:
- The IRD estimating your income (often not in your favor)
- Missing deductions and GST refunds
- Being penalized for non-compliance
- Getting audited with no documentation
- Up to $4,000 in penalties for failing to retain business records
- Extra tax to pay if IRD decides you underreported income
- Loss of credibility with IRD (which could trigger future audits)
Bonus for how long to keep tax records NZ
If you’re serious about staying compliant and saving time at year-end, use these smart habits to make record keeping a breeze.
- Create a dedicated tax folder for each year
- Use an app to snap receipts immediately (e.g. Dext, Hubdoc)
- Reconcile income/expenses monthly
- Use cloud accounting software like Xero
- Keep a checklist of required records for each return
Need help setting things up properly? Feel free to contact us for tailored guidance.
Conclusion
Knowing how long to keep tax records NZ isn’t just about staying organised—it’s about staying compliant. Whether you’re a sole trader, property investor, or business owner, the IRD expects you to keep key financial documents for at least 7 years. This includes everything from GST returns to bank statements and income tax records. Failing to do so can lead to unnecessary stress, missed deductions, or penalties.
The good news? With the right habits, keeping your records in order doesn’t have to be hard. Whether you go digital or stick with paper, just make sure everything is backed up, well-labelled, and easy to access.
Still unsure? A professional can help you put systems in place and stay audit-ready. Feel free to contact us if you need help staying compliant with IRD requirements.
FAQ about how long to keep tax records NZ
How many years of tax records do I need to keep in New Zealand?
You must keep tax records for 7 years from the end of the tax year they relate to, even if you’re self-employed or running a small business.
Do I need to keep tax records if I use accounting software?
Yes. Even if you’re using cloud software like Xero, you must retain access to original documents and ensure they’re backed up and readable.
Can the IRD ask for records older than 7 years?
Only in special cases, like serious fraud or late filing. In most cases, 7 years is sufficient.
What if I’ve lost my tax records?
You should try to reconstruct them using bank statements or other documentation. If you’re unsure, speak to a tax professional.
Do I need to keep physical copies of my receipts?
Not necessarily. The IRD accepts digital records, as long as they are clear, complete, and can be produced on request.