How long should documents be kept in a company?

There are many complex aspects to everything to do with companies and their activities. When it comes to keeping legal documents, there are many questions about the time periods and types of documents that must be kept and how they should be kept.

Keeping a company’s legal documents, an important task

It often happens in companies that they do not want to throw away anything related to the documentation that has been generated by the company’s activity. However, although it is not compulsory to keep everything, it is important to know the retention periods for business-related documentation.

This is essential, among other things, in order to comply with the information requirements established by the Tax Agency and thus avoid the penalty that can amount to up to 2% of turnover.

These mandatory time periods during which legal documents must be kept may be different depending on the type of documentation: tax, commercial or labour.

Types of documents to be kept

When storing legal documents, the type of documentation must be taken into account:

Tax legislation

Tax legislation is the set of rules that regulates taxation, its establishment and application.

As regards the tax documentation that must be kept, the General Tax Law establishes that documents must be kept for four years from the time they are finalised.

The following should be noted in relation to the four-year period:

• It influences the taxpayer’s ability to claim and obtain tax refunds.

• The time limit may be interrupted by any action of the Tax Agency, provided that it has been duly notified.

• It can be paralysed by claims or appeals lodged by the taxpayer.

• It is not advisable to count back four years for the destruction of previous documentation as it will be necessary to check whether the time limit has been interrupted for any taxes.

In some cases, therefore, special attention must be paid to the preservation of documents:

• If a loss has been incurred in a financial year, the related documentation shall be retained for ten years.

• If the Tax Agency has carried out tax revisions or filed a supplementary return, the retention period restarts. For example, if a document from 2020 has been revised in 2022, it will have to be kept until 2026.

• For assets, documentation must be kept for four years after full depreciation. In other words, if we buy an asset in 2015 that is fully depreciated in 2020, the documentation must be kept until 2024.

• In the case of the purchase of fixed assets with a value of more than €3,005.06, invoices must be kept for nine years in the case of movable assets and for fourteen years in the case of immovable assets.

The penalty imposed on companies for failing to submit a mandatory requirement in this respect is 2% of turnover, being at least €10,000. If there have been supplementary tax returns, for example, if in 2022 you file a supplementary tax return for 2018, the deadline starts again according to the supplementary tax return.

For some years now, the limitation period for the verification of taxable income and deductions has been 10 years from the end of the period for filing the tax return in which they were generated.

The activity subject to a limitation period is limited to the actions indicated above but not to the verification activity which, for example, may affect third parties and entail obligations to provide information to the inspectorate.

Companies should consider the following two points, as they are fundamental:

• All documentation relating to taxes must be retained for the six-year period of the commercial statute of limitations.
• Failure to comply with a mandatory reporting requirement may result in a penalty of 2% of the offender’s turnover, with a minimum of 10,000 euros.

Labour regulations

Labour law refers to the set of rules derived from labour law, the purpose of which is to regulate work for hire and reward.

Employment contracts and documents must be kept for a minimum of three years, according to RDL 5/2000 of 4 August. Social security documentation must be kept for 4 years and documentation relating to occupational hazards for 5 years.

It is customary to keep all documentation for 6 years, as indicated in the Commercial Code. In addition, Organic Law 7/2012 of 27/12 recommends keeping it for 10 years.

Commercial law

Commercial law is the set of rules that regulate the activity of traders in the execution of their profession and everything related to it.

The Commercial Code is where the regulations referring to the retention period of documents are to be found. Article 30 states that companies must keep their accounting books, supporting documents and all related documentation for at least six years. This period begins on the date on which the last entry was made in the books.

This article refers to the retention of all documents, both physical and digital, including emails where invoicing is sent and received.

However, there are some documents that need to be kept until they are no longer valid. This means that they must be kept until the action or the agreements contained therein are finalised.

Some of these documents that it is advisable to keep are official accounting books, signed annual accounts, long-term contracts and computer backup copies of accounting records.

Prevention of Money Laundering Regulations

Law 10/2010 on the Prevention of Money Laundering and Terrorist Financing aims to regulate and protect the financial system.

Insurers, financial institutions, investment managers and similar companies must keep all documentation related to their operations for ten years, in accordance with the provisions of Article 25 of the aforementioned law.

How to carry out the conservation of documents

As to how to carry out the conservation of documents, there is also a specific form established for this.

The main characteristic of the stored documentation is that it must always be in original format; copies and photocopies are not valid. It must be guaranteed, whether the documentation is physical or digital, that it is authentic and its content must be original, legible and legal.

The company and the professionals in charge are responsible for keeping the documentation, complying with the retention periods and ensuring that the stored documentation complies with all the requirements established by the regulations.

Where to store company documents

After knowing all the documents that need to be stored and the mandatory and recommended timeframe, the question of where to store all that paper may arise. Although some companies have a dedicated space for this, other companies find it difficult to do so due to space or logistical issues.

An excellent solution to this problem is to rent a storage room for companies. Thanks to the storage solutions we offer you at Cabe, you can store all your documentation in a safe place and save space in your office. Comply with conservation regulations, keep your important documentation close to your workplace and access it whenever you wish with access control to the centre for greater security.

You can also store extra office supplies that you don’t use so often (spare parts, boxes, etc.), stock or work equipment.

Gain in security and increase your office space with Cabe. We offer tailor-made logistics solutions for companies and freelancers, and we adapt the space at all times according to your needs.

All this information is for information purposes only and not as a guide for companies. If you have any doubts or questions, please contact Cabe.

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