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EY 2014 Retention and preservation of data 1

April 2008

A Newsletter from Ernst & Young

Data retention and preservation Overview on requirements in selected countries

Contents

1 Overview and comparison of national requirements for data retention ................. 3

2 Albania .......................................................................................................... 6

3 Austria ........................................................................................................... 8

4 Belgium........................................................................................................ 10

5 China ........................................................................................................... 12

6 Estonia ........................................................................................................ 14

7 Finland ......................................................................................................... 16

8 France ......................................................................................................... 18

9 Germany ...................................................................................................... 20

10 Greece ......................................................................................................... 22

11 Hungary ....................................................................................................... 24

12 Italy ............................................................................................................. 26

13 The Netherlands ........................................................................................... 28

14 New Zealand ................................................................................................ 30

15 Norway ........................................................................................................ 32

16 Poland ......................................................................................................... 34

17 Romania ...................................................................................................... 36

18 Russia .......................................................................................................... 38

19 Singapore .................................................................................................... 40

20 Spain ........................................................................................................... 42

21 Switzerland .................................................................................................. 44

22 Turkey ......................................................................................................... 46

23 United Kingdom ............................................................................................ 48

24 Contacts ...................................................................................................... 50

EY 2015 Data retention and preservation 3

1 Overview and comparison of national requirements for data retention

1.1 Introduction

An efficient and effective process for managing archived information is becoming increasingly important

for businesses. In part, this is due to the rise of digitalization. In addition, companies today must comply

with many legal regulations on electronic data archiving. There are no uniform requirements in the

European Union (EU) for data retention.

To help organizations meet this growing challenge, this brochure provides comprehensive information

on the national requirements for data retention in 22 selected countries.

1.2 Common principles

As a general rule, information relevant to the financial status of a company must be kept in all countries

regardless of further country-specific provisions. However, apart from the strict document preservation

requirements, it is highly recommended that companies consider retaining further specific documents

for evidence purposes. In practice, deciding which documents are relevant may turn out to be very

challenging. The final decision must take into consideration not only mandatory legal provisions, but also

the value of documents as evidence in potential future litigation.

Legal provisions regarding data retention are always found in several sources of the national legislation.

Most countries provide a general rule in their commercial law code and additional rules in tax regulation

or, in fewer cases, in special ordinances for the preservation of documents. Typically, regulations on

data privacy, money laundering or other special issues have implications for data retention.

1.3 Electronic archiving

Most original documents may be transferred to, and retained in, another format (e.g., photocopies,

microfilm, electronic files). Balance sheets and annual reports are important exceptions, as in many

countries they have to be kept as hard copies. However, there might be an obligation to archive data

electronically, if an electronic tax regime had been chosen. In general, if documents are retained in

electronic form, further provisions may apply; for example, some countries allow the retention of

financial information only with authorized software solutions or prescribe basic principles for the archival

setup.

1.4 Storage abroad

None of the countries covered in this report generally prohibit storing data abroad. However, in several

countries, the approval of the tax authorities is required to do so. Some laws require keeping certain

document categories domestically or at least maintaining identical copies inside the country.

1.5 Sanctions

The sanctions for non-compliance with the laws and regulations regarding data retention range from

minor fines to imprisonment of up to six years. Only a few countries limit the consequences of non-

compliance to fines. Usually, directors or the administrative personnel in charge of bookkeeping are held

responsible for non-compliance with data retention laws. However, despite considerable penal

consequences, high-profile convictions are rare.

In daily business, the procedural disadvantages that the loss of evidence can bring about are of much

more significance than criminal sanctions. In particular, with tax inspections and compulsory disclosure

of information relating to litigations (discovery process), record retention in compliance with legal

requirements is important. However, the threat of fines and, in many countries, the personal liability of

responsible persons (up to imprisonment) should not be ignored.


1.6 Codes of best practice

In order to meet best practice, you will have to follow national requirements and regulations. Best

practice means the optimized and balanced consideration of three partially contrary interests:

confidentiality, integrity and availability. There are several international standards, such as ISO 15489,

that prescribe codes of best practice for records retention. These standards also contain suggestions for

special measures to fulfill the requirements by law; for example, to provide the requested documents in

adequate time. ISO/IEC 27002 provides best-practice recommendations on information security

management for use by those responsible for initiating, implementing or maintaining information

security management systems.

1.7 Retention periods

In most covered countries, the general retention period varies from 5 to 10 years, and there are distinct

rules for general documents, tax papers and possibly for further document categories. All countries have

shorter periods for some files related to human resources (HR) due to data privacy implications. There

are exceptionally high periods in Poland and Russia for payrolls, where employee data must be kept for

50 and 75 years respectively. The start dates from which retention periods are calculated varies by

country, and can be the document’s creation date, the end of the calendar year or the end of the fiscal

year. A general maximum retention period for documents does not exist in any legislation. However,

data protection implications may constitute a limit where the interests of an individual are rated higher.

In particular, important limitations apply to some HR-related files, with especially stringent rules for job

applicants that were not engaged.

10

7

7

30

7

10

10

10

5

5

10

7

10

5

10

5

5

6

10

7

10

6

Albania

Austria

Belgium

China

Estonia

Finland

France

Germany

Greece

Hungary

Italy

New Zealand

Norway

Poland

Romania

Russia

Singapore

Spain

Switzerland

The Netherlands

Turkey

United Kingdom

Retention period in years


1.8 EY’s recommendations

Companies should carefully asses:

(i) Which documents have to be retained due to mandatory legal provisions

(ii) Which documents should be retained for other reasons (e.g., purpose of evidence, historical aspects)

(iii) Which documents may be disposed of after a determined period of time

In the last category, the benefits of reduced archiving costs based on the disposal of documents must be

well balanced against downsides – in particular, the potential loss of evidence and restrictions in

historical data research or analytical possibilities.

The electronic retention of documents is, in most cases, a genuine alternative to paper archives.

However, the transformation from paper to electronic format can be difficult and there are potential

downsides (e.g., less probative value, stricter rules for disclosure) that must be considered.

In any case, it is of great importance to have implemented a clear data retention scheme in a company,

based on document retention policies and comprehensive guidance. Furthermore, it is of the highest

importance to have trained and educated employees on document retention processes, including the

categorization of documents. A comprehensive framework is fundamental for a successful and reliable

document retention process.

We hope that this brochure will be useful to you.

Please do not hesitate to get in touch with any country contacts for further advice.

Klaus Krohmann Gabor Sebestyen

Executive Director, Legal Services Senior, Legal Services

Head of IP- & IT-Law Switzerland


2 Albania

2.1 National legislation

General provisions

The main legal provisions regarding data retention in Albania are Article 17 of the Law on Accounting

and Financial Statements and Article 48 of the Law on Tax Procedures.

Most important special provisions

The most important special provisions are Articles 114 to 116 of the Law no. 92/2014 on Value-Added

Tax in the Republic of Albania; Articles 6 and 18 of the Law on Accounting and Financial Statements;

Article 16 of the Law on Anti-Money Laundering and Terrorism Financing; Article 95 of the Law on

Commercial Companies.

2.2 Retention categories and periods

General data retention period

Under the Law on Accounting and Financial Statements (Article 17), accounting records and supporting

evidence must be kept for 10 consecutive years after the end of the accounting period to which they

relate. As the general deadline for the time limitation of damage claims is 10 years (Article 114 of the

Albanian Civil Code), contracts and related commercial documents and correspondence should be stored

at least for that duration.

Important exceptions to the general retention period

Under the Law on Tax Procedures (Article 48), the retention period for tax returns and VAT purchase

and sales ledgers amounts to at least five years starting from the closure of the fiscal year to which they

relate.

Documents concerning Law no. 9917 dated 19, May 2008 on the Prevention of Money Laundering and Financing of Terrorism, as amended, must be retained for five years.

Categories of documents to be retained

The retention obligations encompass the undertaking’s accounts and all related records, tax returns, VAT purchase and sales ledgers, invoices and other supporting documents as well as documents required for anti-money laundering law purposes.

Overview of categories and periods

Document Retention period

Tax returns 5 years

VAT purchase and sales ledgers 5 years

Annual statutory financial statements 10 years

Opening balance sheets and special balance sheets 10 years

Payroll declarations 10 years

Invoices 10 years

General ledgers and other accounting records 10 Years

Audit reports 10 years

Bank statements 10 years

Contracts 10 years

Money laundering prevention documents 5 years

Documents relevant for court litigation As long as proceedings are pending and until proceedings are excluded by the respective statutes of limitation

Jona Bica

Email: [email protected]

Tel: +355 4 24195 70


2.3 Retention form and location

Permitted data carriers

According to the Albanian Law on Tax Procedures (Article 57 Para. 5), tax-relevant documents such as tax returns and VAT purchase and sales ledgers may be stored on data storage devices provided that a complete, sorted and coextensive reproduction that corresponds with the original documents is guaranteed.

Important exceptions to the general retention form

The annual financial statements, opening balance sheets, special balance sheets, audit reports, invoices,

contracts, bank statements and tax returns must be retained as paper-based originals.

Retention location

In general, books and financial documents may be kept outside the Albanian territory. However, they have to be transferred to Albania and stored in the country "within due time" and whenever the competent authorities demand it. Invoices issued, or received, by the Albanian taxpayer should be kept within the territory of Albania (Article 115 Para. 3 of the Law on Value-Added Tax in the Republic of Albania).

2.4 Sanctions

Responsible persons

The proper retention of documents is under the responsibility of the person or persons in charge of the

administration of the company (Article 95 of the Law on Commercial Companies and Article 18 of the

Law on Accounting and Financial Statements).

General sanctions in the event of violation

Failure to maintain proper required books or other tax documentation as required by the Law on Tax Procedures is subject to an administrative penalty amounting to LEK10,000 ALL for small undertakings and LEK50,000 ALL for other businesses (Article 118 of the Law on Tax Procedures).

Civil liability might occur due to violations of retention requirements for the company’s administrators

(Article 98 of the Law on Commercial Companies).

Practice

There is no judicial practice in connection with data retention issues in Albania. However, it is to be noted that in the case that documents relevant for tax purposes are not retained properly and made available to the tax authorities upon their request during tax audits, tax liabilities will be assessed based on estimations as per the alternative methods used. In general, lack of documents is evaluated to the detriment of the taxpayer in administrative or court procedures.


3 Austria


General provisions

The main legal provisions regarding data retention in Austria are Sec. 132 of the Austrian Fiscal Code

and Sec. 212 of the Austrian Commercial Code. As the deadline for time limitation of damage claims is 3

years (in rare cases 30 years, Sec. 1989 of the Austrian Civil Code), from the moment where the

claimant learns the relevant facts, relevant documents should be stored at least for that duration.


The most important special provision is Sec. 18 of the Austrian Value-Added Tax (VAT) Act.



Under Austrian tax law, as well as under Austrian company law, the retention period basically amounts

to seven years (Sec. 132 of the Austrian Fiscal Code; Sec. 212 of the Austrian Commercial Code). The

retention period might be longer in individual cases, because data may not be destroyed or deleted at

the end of the seven-year period if it could be relevant in pending legal proceedings (Sec. 131 of the

Austrian Fiscal Code).


Under the Austrian VAT Act, the retention period for documents concerning real estate property

amounts to 22 years (Sec. 18 of the Austrian VAT Act).


The retention obligations encompass the undertaking's accounts and all related records, as well as all

bills and receipts, and other supporting documents (Sec. 124 of the Austrian Fiscal Code; Sec. 212 of

the Austrian Commercial Code).



Accounts and records 7 years

Inventories 7 years

Annual reports 7years

Situation reports 7 years

Opening balance sheet 7 years

Operating instructions 7 years

Trade or business letters received 7 years

Reproductions of trade or business letters sent 7 years

Job application documents Until proceedings are excluded by the respective statutes of limitation

Documents relevant for court litigation As long as proceedings are pending and until proceedings are excluded by the respective statutes of limitation

Helen Pelzmann


Tel: +43 1 26095 2140




According to the Austrian Fiscal Code (Sec. 132 Para. 2), tax-relevant documents may be stored on data

storage devices provided that a complete, sorted and coextensive reproduction that corresponds with

the original documents is guaranteed.


The annual financial statements, opening balance sheets, special balance sheets and all audit reports

must be retained as paper-based originals.

Retention location

In general, books and documents may be kept outside Austrian territory. However, they have to be

transferred to Austria and stored in the country "within due time" and whenever the competent

authorities demand it.

3.4 Sanctions

Responsible persons

Usually, general managers are responsible for compliance with the retention obligations (Sec. 100

Austrian Stock Company Act; Sec. 75 Austrian Limited Liability Act).


Concealment of facts regarding limited liability companies and stock companies may be punished by the

criminal courts with imprisonment of up to one year or a fine of up to 360 daily penalty rates or both

(Tagessätze, Sec. 255 Austrian Stock Company Act; Sec. 122 Austrian Limited Liability Act).

Practice

There is more or less no court practice with regard to violations of retention duties. However, in the case

of missing documents, financial authorities are entitled to determine the tax debts by estimation (Sec.

184 of the Austrian Fiscal Code) which, according to experience, is usually detrimental to the respective

undertaking. Furthermore, general managers may face damage claims by the undertaking's

shareholders as well as by its creditors (Sec. 100 Austrian Stock Company Act; Sec. 75 Austrian Limited

Liability Act).


4 Belgium


General provisions

The main legal provisions regarding data retention in Belgium are the Belgian Companies Code (Article 195) and the Act of 17 July 1975 regarding companies’ accountancy (Articles 6 and 8).


The most important special provisions containing retention requirements are:

• Companies’ accountancy: Article 9 of the Royal Decree of 12 September 1983, regarding the execution of the Act of 17 July 1975, concerning companies’ accountancy

• Social law: Articles 22 to 25 of the Royal Decree of 8 August 1980, regarding the maintenance of employment-related documents

• Tax law: Articles 315 and 315bis of the Belgian Income Tax Code

• VAT regulations: Article 60 Para. 3 of the Belgian VAT Code and Article 9 of the Royal Decree of 10 December 1969, regarding the rules governing deductions for the application of VAT



As a general rule, the retention period is three to seven years. Most documents ought to be retained for

a period of seven years (as from 1 January following the fiscal year in progress.


Incorporation documents, articles of association and meeting minutes should be kept permanently,

throughout the existence of the company and until five years after the liquidation of the company.

Employee records (work regulation) should be kept as long as there are workers in service.

Immovable asset documents related to VAT need to be retained for 15 years.



Incorporation documents, articles of association, meeting minutes (of board of directors, general assembly, etc.), compliance-related documents

Permanent, more than 5 years after liquidation

Employee records (work regulation) Permanent, as long as there are workers in service

VAT documents related to immovable assets (for which a 15-year revision period is foreseen)

15 years

Employees’ medical files 15 years from the termination date of the employment agreement

Accounting books (including balance sheets), unless in the event of a liquidation of the company (then 5 years after liquidation)

7 years from 1 January following the fiscal year in progress

Income tax-related documents (accounting documentation, IT documents related to computer systems and programs used) and VAT-related documents (invoices)

7 years from 1 January following the fiscal year in progress; the data related to the analysis, the programs and the management of the computer systems needs to be retained for 7 years as from 1 January following the last year in which the computer system or program has been used

Justification documents related to accounting books that are meant to serve as proof against third parties

7 years

Employee records (general and special employee registers, 5 years

An Meheus


Tel: +32 2774 9457



individual accounts and appendices, agreements regarding the employment of students, agreements regarding the employment of home workers and trainees)

Records regarding employees’ accidents 3 years from the termination date of the employment contract

Justification documents related to accounting books that are not meant to serve as proof against third parties

3 years

Legal documents in case of bankruptcy 6 months



Only unchangeable data carriers, such as paper, CD-ROM, DVD-ROM and microfilm, as well as

changeable data carriers, such as hard disk and tape (if further requirements are met), are deemed to be

permitted data carriers. In particular, the inalterability and the accessibility of the data registered during

the entire compulsory retention period must be guaranteed (the format must allow an adequate control).


Incorporation documents, bylaws, meeting minutes and all company-related documents need to be

recorded, signed and retained as paper-based originals. The share register, however, can be kept either

in paper or in electronic form.

Retention location

As a rule, documents should be retained at the registered office of the company.

Accounting documents may be centralized on a server localized abroad, as long they are completely

accessible from the registered office of the company via online access.

4.4 Sanctions

Responsible persons

The retention of accounting documents is the responsibility of the directors. The retention of social

documents is the responsibility of the employers (company). The company is also responsible for the

retention of tax returns and VAT-related documents.


• Fines of up to €125,000

• Imprisonment of up to five years

Practice

Electronic filing of a company’s annual accounts is the rule in Belgium (Article 101 of the Belgian

Companies Code). The filing of the annual accounts is usually electronic, as paper is limited by Royal

Decree to certain types of entities, such as associations and foundations, foreign companies, and

companies whose turnover is less than €500,000.

In practical terms, the loss of evidence and procedural disadvantages as a consequence of this are of

much more significance than the potential risk of criminal sanctions. In addition, the tax audits

conducted on a regular basis with Belgian companies are highly relevant in this context. If a tax inspector

discovers that documents relevant for tax purposes are not traceable or stored as requested by law, he

will assess the tax claim based on an estimate.


5 China


General provisions

The main legal provisions regarding data retention in China are the Archive Law, some provisions in

Accounting Law and Company Law.


Aside from the Archive Law, the Accounting Law and the Company Law, the most important special

provisions containing retention requirements are:

• Provisions on Archiving Scope and Retention Period of Enterprises' Documents and Materials that give detail to the archiving scope and retention period of various management documents and materials of enterprises

• Procedures for the Administration of Accounting Archives that provide the archiving scope and the retention period, form and location of accounting archives

• Provisions on the Administration of Employee Archives of Enterprises that give detail to the archiving scope and the retention form and location of employee archives



There is no general rule in Chinese law that stipulates the data retention period. There are different rules and periods for different types of documents. Apart from documents that need to be retained permanently, minimum retention periods as provided under laws and regulations in China usually range from 5 years (e.g., for certain bank statements) to 30 years (e.g., for certain general documents and materials of enterprises in relation to dealing with the accounting, audit and legal matters.


Original receipts related to unsettled debts and claims or other original receipts where the relevant

situation is ongoing shall not be destroyed; these records shall be filed separately and kept until the

matter in question is settled. The accounting records related to ongoing construction projects shall not

be destroyed when their minimum retention period is over.

Overview of categories and periods (not exclusive)


Incorporation documents, articles of association, meeting minutes (of board of directors, board of supervisors and general meeting of shareholders), documents and materials for increase in capital and share, equity transfer and debt financing

Permanent

Accounting receipts, ledgers, detailed accounts and daybooks At least15 years from the first day of the end of the relevant fiscal year (daybooks for cash and bank deposits shall be kept for at least 25 years from the first day of the end of the relevant fiscal year)

Annual (final) statements (including written analysis) Permanent

Bank statements and bank balance adjustment reports At least 5 years from the first day of the end of the relevant fiscal year

Documents and materials on the recruitment, regularization, hiring, adjustment to salary, classification, suspension from duty without pay, resignation, retirement, death, pensions and arrangement of the personnel of the enterprise

Permanent

Documents and materials for tax registration, payment, deduction, credit and refund of the enterprise

Permanent

Court judgments, written mediation and other litigation and Permanent

Michael Weng


Tel: +86 21 2228 8428



arbitration documents and materials

General legal affairs-related work documents and materials At least 30 years



Permitted data carriers include data storage devices or carriers that can be preserved permanently.

Archived electronic documents shall be preserved with corresponding papers except for those

electronic documents without corresponding papers or that indeed cannot be outputted on paper.


Entities that perform their bookkeeping on computer must keep hard copies of accounting records.

Entities must use office papers (size: 16K) for employee archives.

Retention location

State-owned archives and collectively owned or individually owned archives whose preservation is of

value to the state and society, or that should be kept confidential, as well as duplicates of such archives,

shall not be carried or transported out of the country without authorization. Copies of enterprises’

archives can be donated to, exchanged with, or sold to, foreign entities or individuals with review by, and

approval from, the state, provincial, regional or municipal archival administration department under

limited circumstances.

Entities operating within Chinese territory shall not allow their accounting records to be taken out of the

country. Employee archives of the enterprise shall be managed by its HR department.

5.4 Sanctions

Responsible persons

The archival institutions or archivists of the entities shall be responsible for preserving its archives.


For criminal liabilities, when the entity deliberately hides or destroys the accounting documents, account

books and financial accounting reports that should be preserved in accordance with the law, and if the

circumstance is serious, the persons directly in charge and the other directly responsible persons shall

be sentenced to fixed-term imprisonment of not more than five years or criminal detention, with a fine of

not less than RMB20,000 but not more than RMB200,000.

For administrative liabilities, if any of the following acts is committed, the archival administration

department of the people's government at or above the county level, or the competent authorities

concerned shall, in accordance with law, impose administrative sanctions (i.e., warning, fine or

confiscating illegal income) on persons directly in charge or other persons directly responsible for either

1) failing to adopt any measures for the archives being preserved, with knowledge that they are in

danger, thus causing damage to the archives; or 2) causing losses to archives as a result of neglect of

duty on the part of archivists.

Practice

There are few administrative sanctions on entities for loss of archives. However, Chinese court precedents indicate that if a company lost its employee personal archive record, it must either regenerate those archives or compensate the relevant employee for loss of the personal archive record.


6 Estonia


General provisions

The main legal provisions regarding data retention in Estonia are stated in the Estonian Taxation Act, the Commercial Code and the Estonian Accounting Act.


The most important special provisions are the Estonian Taxation Act Article 58 and the Estonian

Accounting Act Article 12 Para. 1. The Estonian Value-Added Tax Act also contains specific rules about

retention requirements and some general rules are stated in the Estonian Income Tax Act (Article 36).



As a general rule, documents have to be retained for 7 years.


Under Estonian law, there are no exceptions to the general retention period. All accounting and tax-

related documents have to be retained for seven years. According to the Accounting Act, an accounting

entity shall preserve accounting source documents for seven years as of the end of the financial year

during which the source document was recorded in the accounts. Accounting ledgers, journals,

contracts, financial statements, reports and other business documents that are necessary for

reconstructing business transactions during audits shall be preserved by the accounting entity for seven

years as of the end of the corresponding financial year. Business documents relating to long-term rights

or obligations shall be preserved for seven years after the expiry of their term of validity. Accounting

rules and procedures shall be preserved for seven years after the amendment or replacement thereof.



Balance sheet 7 years

Annual reports 7 years

Contracts* 7 years

Bank account statements 7 years

VAT declarations 7 years

Invoices 7 years

Documents related to transactions (except contracts) 7 years

Other accounting documents 7 years

* Retention period for employment contracts is 10 years.



The taxpayer has to preserve copies of invoices issued by, or on behalf of, the person and invoices for goods acquired or services received by, or on behalf of, the person in chronological order for seven years as of the date of their issue or receipt. The information set out in an invoice shall be preserved in its original form. Customs declarations certifying the import of goods shall be preserved for seven years as of the beginning of the calendar year following customs formalities.

Ranno Tingas


Tel: +372 611 4578


Records may be kept electronically, if it is ensured that documents, including accounting records, created as a result of accounting are preserved for a seven-year period.

Retention location

There is no certain location rule for retention. The company may store its documents as it determines

but if the tax authorities (or other justified governmental institutions) require documents on legal

grounds, the company has to able to hand over all required documents (accounting or tax-related) in

reasonable time (approximately five workdays).

If documents are stored electronically in servers, documents may be submitted to the authorities

electronically.

6.4 Sanctions

Responsible persons

According to the Estonian Commercial Code, the management board of the company is responsible for organizing its accounting activities and therefore the board member(s) are responsible for retention of documents.

In case board members change, new members have to be certain that all documents have been handed over and that they have been stored in compliance with respective requirements.


If a board member or an accountant infringes data retention requirements, the relevant authorities may

initiate misdemeanor procedure and impose a fine on a company, board member (as a natural person) or

an accountant. Respective rules and procedures are enacted by the Estonian Code of Misdemeanour

Procedure and the Taxation Act.

If some required documents are missing, the tax authorities may initiate fiscal control for a particular

taxation period.

Practice

The court practice regarding data retention in Estonia is very limited. As a rule, the authorities provide

additional time to present necessary documents and do not immediately initiate procedural acts. If a

company is not able to fulfil the tax authorities’ request, the tax authorities may assess additional tax

(for a certain period) and in some very rare cases start misdemeanor procedures (only if false intention

is identified).


7 Finland


General provisions

The main legal provisions regarding data retention in Finland are: the Bookkeeping Act (Kirjanpitolaki)

(1336/1997), Chapter 2, Sec. 10; the resolutions regarding the methods to be used in bookkeeping

(47/1998); and regulations on temporary storage of bookkeeping material outside Finland (49/1998).

Other acts that need to be taken into account are the Act on Limitation Periods (728/2003), and other

acts containing limitation periods for other issues, such as claims.


Special provisions are applicable for real estate investments, social security law and other specific laws,

such as:

• Employment Contracts Act (Työsopimuslaki)

• Employee Pension Act (Työntekijäin Eläkelaki)

• Personal Data Act (Henkilötietolaki)

• Act on the Protection of Privacy in Working Life (Laki yksityisyyden suojasta työelämässä)

• Act on the Protection of Privacy in Electronic Communications (Sähköisen viestinnän tietosuojalaki)

• Limited Liability Companies Act (Osakeyhtiölaki)



As a general rule, documents need to be retained for 10 years from the end of the accounting year

(Bookkeeping Act Chapter 2, Sec. 10).


Documents related to real estate investments need to be retained for 13 years (VAT Act § 209q).



Balance sheet 10 years

Receipts 6 years

Documents related to real estate investments 13 years

Tax return files 10 or 6 years

Other documents 10 years (in general)

Ulla Riekki


Tel: +358 50 322 3809




Permitted data carriers are paper and certain computerized carriers; for example, CD-ROM and DVD-

ROM. This is more closely set out in the Bookkeeping Act and the decree regarding the methods to be

used in bookkeeping (1998/47). The data carriers must be such that the contents cannot be altered and

the stored content is in readable form.


Paper is required for balance sheet books.

Retention location

In general, the bookkeeping material should be stored in Finland. Temporary and permanent storage

outside Finland is possible if the respective legal requirements are met.

7.4 Sanctions

Responsible persons

Managing directors and boards of directors.


Fines or imprisonment of up to four years (in case of accounting offense as acted in the Criminal Code of

Finland Chapter 30 Sec. 9, 9a and 10); Special sanctions as enacted in the specific laws.

Practice

In daily business, the loss of evidence and procedural disadvantages as a consequence are of much more

significance than criminal sanctions, which tend to be relatively minor fines. In addition, the tax audits

conducted on a regular basis with Finnish firms are important in this context. If a tax inspector discovers

that documents relevant for tax purpose are not traceable or stored as requested by law, they may

assess the tax claim based on an estimate. In addition, punitive tax increases, as well as additional taxes,

may later be determined by the tax authorities.


8 France


General provisions

The main legal provisions regarding data retention in France are:

• The commercial prescription period from the French Code of Commerce

• The civil prescription period from the French Civil Code


Specific documents may be subject to specific regulations, especially documents related to:

• Labor law issues (for instance, payrolls)

• Banking issues (for instance, documents related to anti-money laundering issues)

• Insurance issues (for instance, documents related to injury claims)



As a general rule:

• The commercial prescription period is 10 years.

• The civil prescription period is 5 to 20 years.


HR However, some

documents related to employees, such as ratings and performance measurements, must be deleted

within a couple of months.



General accounting documents 10 years from creation of the document (French Commercial Code)general rule subject to specific provisions on a case-by-case basis)

Banking documents Duration of contractual relationship plus 5 years

Employee records Duration of employment plus 5 years

General legal documents From 5 to 20 years (civil prescription period)

Tax returns 3 years

Fabrice Naftalski Email: [email protected]

Tel: +33 1 55 61 10 05




French law admits both hard copies and electronic files (provided that electronic files comply with

specific provisions).


electronic invoices of sales

giving rise to VAT must be retained in their original format for a period of six years (French Tax Law

Proceedings Code). If these invoices are issued in computerized format, they can be retained as such.

But the computerization of a paper invoice does not count as an original invoice (tax instruction).

8.4 Sanctions

Responsible persons

The proper retention of documents is the responsibility of the company or its directors.


• Penal risk: for instance, according to Articles L. 441-3 and R. 441-3 of the French Commercial Code, failing to archive invoices properly is a criminal offense (a fine of up to €75,000).

• Specific risk of tax litigation if the company cannot produce original invoices for the relevant period. The tax penalties can reach up to 40% of the amount of VAT demanded. Tax authorities can also impose a fine of up to €3,000 if the company cannot produce such documents upon request for six years (Tax Code).

• Risk of judiciary litigation (especially before the French civil, commercial or labor courts).

Practice

• French Data Protection Regulations apply if personal data is stored: specific recommendations were issued by the French Data Protection Authority (the CNIL) on 11 October 2005 (decision no.

• Specific issues regarding electronic archiving:

• Since 2000, the French Civil Code admits electronic files as evidence of a document, with the same probative value as hard copies.

• However, the French Civil Code provisions are considered by professionals as unclear and, as a consequence, are typically unused.

• There are only a few court decisions at present.

• Professionals rely mostly on “evidence agreements” and on standardization work (ISO, AFNOR, etc.).


9 Germany


General provisions

The main legal provisions regarding data retention in Germany are Sec. 147 of the Fiscal Code and Sec.

257 of the Commercial Code. Sec. 35 of the Federal Data Protection Act outlines deletion duties

regarding personal data. The deadline for time limitation of legal claims is three years to the end of

the calendar year from the moment when the claimant learns the relevant facts (Sec. 195 German

Civil Code).


With the Grundsätze zum Datenzugriff und zur Prüfbarkeit digitaler Unterlagen (GdPdU), the Ministry of

Finance details the tax retention duties by the “principles for the access to data and the verifiability of

digital files.” These principles, in particular, give detail to the technical requirements of data storage.


There is no general rule in German law that stipulates the data retention period. There are different rules

and periods for different kinds of records and files. Retention periods in Germany range from 2 months

(e.g., job application documents) to 10 years (e.g., annual reports).



Accounts and records 10 years

Inventories 10 years


Situation reports 10 years

Opening balance sheet 10 years

Operating instructions 10 years

Trade or business letters received 6years

Reproductions of trade or business letters sent 6 years

Job application documents 2 months

Documents relevant for court litigation 3 years to the end of a calendar year; up to 30 years



According to the German Fiscal Code (Sec. 147 Para. 2), tax-relevant documents may be stored as

reproductions on picture storage devices or on other data storage devices where this is commensurate

with the principles of orderly accounting and it is ensured that the reproductions of the data correspond

to the original, both visually and in terms of content. The data must also be accessible, readable and

ready to process automatically at any time during the storage period. Only annual reports and opening

balance sheets must be retained as paper-based originals.

Peter Katko Email: [email protected]

Tel: +49 89 14331 25351


Technical standards

With regard to electronic archiving, the Institute of Public Auditors in Germany (IDW) published

recommendations called IDW ERS FAIT3 (Grundsätze ordnungsmäßiger Buchführung beim Einsatz

elektronischer Archivierungsverfahren). They put the requirements of Sec. 257 Para. 3 HGB in concrete

terms and give instructions on how to fulfill the generally accepted accounting principles. Furthermore,

beyond GdPdU, standards for the use of electronic data processing systems for accounting purposes can

be found in the GoBS (Grundsätze ordnungsgemäßer DV-gestützter Buchführungssysteme).

Retention location

In general, documents must be retained in Germany but, provided that certain requirements are met,

they may be stored abroad. These requirements are: written application to the competent revenue

authority; information to the authority on the location of the data processing system; compliance with

the duties arising from (1) Sec. 90, 93, 97, 140 to 147 and 200 and (2) the German Fiscal Code; full

access to the data for German authorities; and that the taxation procedure is not made cumbersome.

9.4 Sanctions

Responsible persons

The proper retention of data is the responsibility of the person or body in charge of the administrative

obligation. The deletion under data protection law is up to the “controller” in the meaning of Sec. 3 Para.

7 of the Federal Data Protection Act.


Failure to maintain the required books of account or other documentation, required by commercial law,

can result in imprisonment of up to two years or a fine of up to €5,000, or both (Sec. 283 b Criminal

Code).

Practice

There is little court practice with regard to violations of retention duties. However, there is the risk that,

in the absence of records, the financial authorities will find it easier to estimate the tax burden to the

detriment of the taxpayer.


10 Greece


General provisions

The main legal provisions regarding data retention in Greece are provided in the Article 250 of the Civil

Code and in the Article 7 of the Law 4308/2014 on Greek Accounting Standards.


Specific documents may be subject to specific regulations such as:

► Law 4174/2013-Greek Code of Tax Procedure “CTP”

► Law 4308/2014- Greek Accounting Standards

► Employment Law

► Banking Regulatory Framework (for documents related to anti-money laundering issues)



As a general rule the Greek Civil Code stipulates that the documents need to be retained for 5 years,

same with the time limit of action for claiming damages out of commercial disputes.

Article 7 of the Law 4308/2014 on Greek Accounting Standards defines that accounting and fiscal

records need to be kept for a period of 5 years from the end of the financial year that they concern, if

not ruled differently in any other regulation.


According to the Article 13 and 36 of the Law 4174/2013 - Greek Code of Tax Procedure, the

company’s books and records must be stored at least for 5 years.

Exceptionally, in case of tax evasion allegations the retention period is 20 years.

The standard period that the company is obliged to retain documents regarding the employer –employee

relationship is 5 years. However, due to the fact that the claims of the competent authority of the Social

Security might be raised for a period up to 10 years, the retention period for employee related

documents in practice is set to a time limit of 10 years.


► Accounting books and records

► Balance sheets



General legal documents 5 to 20 years (civil prescription period)

Accounts and records 5 to 20 years

Annual reports 5 to 20 years

Balance sheets 5 to 20 years

Banking documents loan- or credit-related documents 5 to 20 years

Employee records 2 to 10 years

Tassos Anastassiadis Email: [email protected]

Tel: +302 102 886 592




Greek law admits both hard copies and electronic files such as DVDROM and CD-ROM. Therefore, the electronic format is permitted as long as it is possible to retrieve the data in correct, full and readable form and the integrity of the document is ensured (tax requirement).


There are no important exceptions.

Retention location

The new provisions of the Greek Accounting Standards (L. 4308/2014) do not regulate the retention location of company’s books and records. Consequently, they may be stored anywhere, even during the fiscal year that they concern, under the condition that they can be promptly provided to the Tax Authorities upon request.

10.4 Sanctions

Responsible persons

The proper retention of documents is the responsibility of the company and of its directors.


Failure to align with the rules on document retention is generally sanctioned with fines — provided that such failure does not constitute a criminal offense.

Practice

If, during a tax audit, the Tax Authorities discover that relevant documents are missing or not duly archived, the tax claim may be assessed based on estimation.


11 Hungary


General provisions

There is no general legal provision in Hungarian law that stipulates a standard data retention period.

Since the statutory limitation period set out in the Civil Code (Act no. 4 of 1959) is five years, this is

applicable as a standard period.


Act no. 92 of 2003 on the Rules of Taxation and Act no. 100 of 2000 on accounting.



General company documentation needs to be retained for the five-year limitation period. In case of

prolongation for any reason (e.g., litigation), the retention period is increased accordingly.


• The Act on the Rules of Taxation prescribes that documents and reports supporting tax calculations should be kept for the limitation period related to the right to impose tax, which, in general, ends on 31 December of the fifth year following that in which the tax return in question had to be filed or the tax had to be paid.

• The Act on Accounting prescribes that the following documents should be kept for eight years:

(i) Business reports and inventories, analytics, ledgers and other records supporting the business

report

(ii) Any accounting documentation (e.g., invoices, contracts, bank account extracts and financial

statements) that either directly or indirectly support the accounting.

• There are no express legal provisions related to how long employers should keep historic employee records. It is suggested that they are kept for at least 8 years after the termination of the employment relationship, and it is advisable to retain them for 50 years, as the Pension Authority may request these in order to establish pension entitlements.

• Act no. 5 of 2006 on Company Procedure prescribes that the attorney-at-law must retain the original copy of corporate documents they prepared, as well as documents attached to the incorporation request filed with the company court. This obligation applies for an indefinite term. If the attorney-at-law’s chamber membership ceases, the documents should be placed in the chamber’s archives.

• Service providers falling under the scope of Act no. 136 of 2007 on Anti-Money Laundering and Countering of Terrorism Financing (e.g., financial and investment service providers and insurance companies) have the obligation to retain data and documents received in the course of performance of their duties under the act for eight years following the date of recording. Data or documents received at the establishment of a business relationship shall be retained for eight years following the termination of the business relationship.


The following categories can be distinguished: general company documentation, documents supporting

tax calculations, business reports and records supporting the business report, accounting

documentation and employee records.

Reka Hatala Email: [email protected]

Tel: +36 1 451 8564




General company documentation 5 years

Documents supporting tax calculations Until 31 December of the fifth year following that in which the tax return in question had to be filed or the tax had to be paid

Business reports and supporting records 8 years

Accounting documentation 8 years

Employee records 8 years after termination of employment



According to the Act on the Rules of Taxation, the original document or — unless prescribed otherwise by

law — its certified electronic copy, must be retained. The tax authority is not entitled to request the

original (paper-based) copy of a document in procedures running in front of the tax authority, provided

that the electronic copy complies with the mandatory requirements mentioned above. However,

destruction of the paper-based original document is not advisable, since the possibility of the court

requesting the original document in a procedure running before it cannot be excluded, if, for example,

doubt arises in connection with the content of the original document.


Attorneys-at-law must retain the original paper-based copy of corporate documents prepared by

them and the documents attached to the incorporation request filed with the company court.

Retention location

Books and records should be kept at the place registered with the tax authority. If the place where the documents are stored changes, the new place of storage has to be registered with the tax authority within 15 days. There are no restrictions on maintaining books and records abroad.

The transfer of personal data in books or records to another European Economic Area country is considered as a transfer within the territory of Hungary. In connection with the transfer of personal data to a third country, certain data protection restrictions apply.

Documents can temporarily be transferred outside the place registered with the tax authority as a place of storage for bookkeeping purposes; upon request, the accounting and tax-related documents must be presented within three working days.

11.4 Sanctions

Responsible persons

As a general rule, retention of data is the responsibility of the person in charge.


Sanctions can be fines of up to HUF1m (ca. €3,500), and in the case of missing paper-based invoices or receipts, HUF500,000 (ca. €1,750) per missing invoice or receipt.

Practice

If the tax authority discovers that documents relevant for tax purposes are not available, it will assess the tax based on an estimate. There is no significant judicial practice in connection with data retention issues. In general, lack of documents is evaluated to the detriment of the taxpayer in administrative or court procedures.


12 Italy


General provisions

The main legal provisions regarding data retention in Italy are: the Italian Civil Code (Articles 2214 to

2220) that regulate bookkeeping and accounting recording; Article 39 of Presidential Decree, 26

October 1972, n. 633, which relates to VAT; and Article 22 of Presidential Decree 29 September 1973,

n. 600, which relates to tax inspection and tax litigation.


The most important special provisions are included in the Decree of the Minister of Finance, 23 January

2004, for the use of electronic documents in bookkeeping and accounting recording in compliance with

tax obligations. Furthermore, social security law, customs requirements, product declaration and

environmental law contain special retention requirements.



As a general rule, the retention period is 10 years, unless litigation arises. In such a case, the retention

period is prolonged until the litigation is complete.


related to VAT or for other tax purposes (e.g., tax returns) need to be retained for at least

7 years (after which time, the tax authority cannot challenge the validity of the VAT declarations or tax

However, some documents related to former employees (e.g., ratings and performance

measurements) for which retention is not mandatory must be deleted within 6 to 18 months in line with

data protection regulation.



General accounting documents 10 years

Inventories 10 years


Balance sheets 10 years

Trade or business letters or general messages received 10 years

Reproductions of trade or business letters or general messages sent 10 years

Employment documents Duration of employment, in some cases until retirement of the employee

Job application documents As long as relevant

Documents relevant for court litigation or tax cases Until the litigation is ended

Luigi Neirotti Email: [email protected]

Tel: +39 02 85 14 828




Unchangeable data carriers, such as paper, CD-ROM and DVD-ROM, as well as changeable data carriers,

such as hard disk and tape, are deemed to be permitted data carriers. This is provided that the integrity

of documents is ensured with recourse to digital signature (advanced electronic signature based on a

qualified certificate issued by a qualified certification service provider and using a secure signature

creation device).


• Some customs documents have to be recorded and signed as paper-based originals.

• Securities must be retained as paper-based originals.

• Documents issued in electronic form, e.g., electronic invoices, must be retained in electronic form.

Retention location

As a rule, documents can be retained outside Italy, provided that it is possible, at all times, upon request

by the tax authority, to print documents, copy the data onto a different medium or grant access to the

document on a video display. In the event that the storage location is in a country with which Italy does

not have in place a legal instrument of cooperation (i.e., law enforcement of the request of the tax

authority), preliminary approval by the Italian tax authority is required (detailed information will be

requested).

12.4 Sanctions

Responsible persons

The responsibility for the prop

responsible individuals cannot be assessed — which is not likely, as document retention is the ultimate

responsibility of the board of directors — the company can be penalized.


Fines of €1,032 up to €7,746 or imprisonment from six months to five years are possible. If a wider criminal offense has been committed, then harsher sanctions are possible; for example, in the case of bankruptcy, there is a supplemental crime that is punishable by imprisonment of up to 10 years.

In addition, civil liability and procedural disadvantages might result from violations of retention requirements.

Practice

• Italian Data Protection Regulations also apply if personal data is stored (please note that in Italy the definition of personal data includes the data of legal entities).

• Specific issues regarding electronic archiving: hash value of electronic archives must be sent to the Internal Revenue Service (Agenzia delle Entrate) by the fourth month after the annual submission of the tax return.

• Since 2004, Italian regulation has allowed electronic records to be kept as evidence of a document, with the same probative value as hard copies.

• There are few court decisions with regard to violations of retention duties; however, in the absence of records or in the case of non-compliance with regulation related to electronic archiving, the financial authorities are likely to challenge the taxpayer with lack of bookkeeping (this is a criminal offense in the case of bankruptcy).


13 The Netherlands


General provisions

The main legal provision regarding data retention in the Netherlands can be found in the General Tax Act

(GTA) (Algemene Wet inzake rijksbelastingen) and the Dutch Civil Code (Burgerlijk Wetboek).


The most important special provisions regarding data retention can be found in the Data Protection Act (DPA) (Wet bescherming persoonsgegevens), the Act on the prevention of Money Laundering and Financing Terrorism (Wet ter voorkoming van witwassen en financieren van terrorisme), the Medical Treatment Act (Wet op de geneeskundige behandelingsovereenkomst), the Decree on Prudential Rules for Financial Undertakings (Besluit prudentiële regels Wet financieel toezicht) and the Wage Witholding Tax Act 1964 (WWTA) (Wet op de Loonbelasting 1964).



In principle, companies have a retention obligation to retain accounts, records and other data that provide information on the rights and obligations of a company (the company books and records) for a period of seven years. These records have to be retained in such a manner that the rights and obligations of the company can be shown at any time. This means that the authenticity and integrity of the electronic records should be adequately ensured, the records should be accessible during their retention period and should be made legible within a reasonable time frame.


Data and documents regarding immovable property must be retained for 10 years from the moment of

creation. Information (name, date of birth, tax registration number and address) about employees must

be retained at least for 5 years after termination of the employment contract, with regard to wage

withholding tax obligations (Articles 7.9 and 28 WWTA). Payroll and severance pay records should be

removed 2 years after termination of the employment contract (Articles 8 and 9 of the Exemption

Decree DPA). Furthermore, the retention period for personal data is limited to the term necessary for

achieving the purposes for which the personal data was collected or subsequently processed (Article 10

DPA).



Accounting, administration and finance documents (e.g., annual accounts, profit and loss accounts, debtors and creditors administration, inventory records, salary administration)

7 years upon creation of the document

Books, records, documents or other administration of a dissolved company 7 years as from date of dissolution of the company

Retention of personal data No longer than necessary for achieving the purposes for which the personal data was collected or subsequently processed

Data regarding immovable property 10 years upon creation of the document

Employee records (in relation to payroll tax and salary administration, including identity documents and request on wage withholding tax discounts)

(At least) 5 years after termination of employment contract

Employee payroll and severance pay records (in relation to illness, a closed reintegration file)

2 years after termination of employment contract

Peter Kits Email: [email protected]

Tel: +31 88 4070018


Job application documents 4 weeks, with a maximum of 12 months

Camera images in public places 4 weeks, with a possibility to extend in case of registered criminal offenses

Medical records (At least) 15 years from creation, unless patient requests earlier removal

Data originating from a telecommunications infrastructure that is required for the transfer of communication or invoicing, and data that shows the current location of the user

12 months for telephone communications data and 6 months for internet data

Data about the identity of a client, natural or legal person, for the prevention of money laundering and terrorism

5 years upon registration of the data



The main rule is that it will be possible to retrieve the data in correct, full and readable form at all times

and that the integrity of the document(s) is ensured. Dutch law admits both hard copies and electronic

files (provided that electronic files comply with specific provisions).


A company’s profit and loss accounts and annual financial statement must be retained in paper format

(Article 52 Para. 5 GTA).

Retention location

The main rule is that it will be possible to retrieve the data in correct, full and readable form at all times

and that the integrity of the document(s) is ensured. Temporary and permanent storage outside the

Netherlands is possible if the respective legal requirements of, for example, the DPA are met.

13.4 Sanctions

Responsible persons

The person or body in charge of the administrative obligation (Article 52 Para. 2 GTA: directors, Article

1 Para. d DPA: controller).


Fines, community service or imprisonment. For example, violation of the GTA can result in a fine up to €7,800 or imprisonment up to six months. Special sanctions are enacted in the specific laws.

Practice

Rapid technological improvements and digitalization have also had an impact on data retention criteria,

especially from the Dutch Tax Department. However, the Dutch tax authorities do not prescribe or agree

on certain digital formats.

Case studies

There is limited case law available regarding the subject of data retention. However, in September 2014, the Data Protection Authority concluded that Adecco Group Nederland (a temporary employment agency) acted contrary to the DPA as they retained information of temporary employees for more than 24 years. The Data Protection Authority stated this was longer than necessary for achieving the purposes for which the personal data was collected. As a result, Adecco changed its data retention policy.


14 New Zealand 14.1 National legislation

General provisions

The main provisions regarding data retention in New Zealand are found in the Companies Act 1993 (Sec. 189–191, 194–195) and Tax Administration Act 1994 (Sec. 22, 22B and 23).


The data retention of some documents is governed by specific legislation:

• Goods and Services Tax Act 1985 (Sec. 75) relates to data retention for GST purposes.

• Employment Relations Act 2000 (Sec. 130 and 132) relates to data retention for employment law purposes.

• Reserve Bank of New Zealand Act 1989 (Sec. 156A) relates to data retention of documents by banks.

• Financial Markets Conduct Act 2013 (Sec. 458) relates to accounting records of Financial Markets Conduct FMC reporting entities.

• Privacy Act 1993 (Principle 10) relates to organizations holding personal information.



There is no general rule in New Zealand law that stipulates the data retention period. Retention periods in New Zealand range between 6 and 10 years. Tax and company records must be retained for seven years (Sec. 189 Para. 1 (i) Companies Act 1993 and Sec. 22 Tax Administration Act 1994).


A company may have a retention period shorter than the general seven years, with approval in writing from the Registrar of Companies (Sec. 189 Para. 2 Companies Act 1993). Another exception is that certain company records (certificate of incorporation, statement of registered office and address, company constitution, share register, interests register and name and address of directors) must be retained for the duration of the company’s existence. Furthermore, copies of all written communication to all classes of shareholders and financial statements (including group financial statements) must be retained for 10 years.



Accounting records 7 years

Financial statements (i.e., statement of financial position, profit and loss statement, statement of cash flows, notes or documents relating to financial statements)

7 years

Tax records (i.e., account books recording receipts or payments, bank statements, invoices, vouchers, other such documents verifying the entries in the account books)

7 years

GST records (i.e., account books recording receipts or payments, vouchers, bank statements, invoices, tax invoices, credit notes, debit notes)

7 years

Employee records (i.e., wages, other money payable and time records) 6 years

Accounting records of Financial Markets Conduct reporting entities 7 years from the completion of the transaction to which the records relate

Bank records (i.e., drawn cheques and bank drafts, bills of exchange, promissory notes and vouchers in possession of banks)

7 years

Kirsty Keating


Tel: +64 274 899 090



Personal information held by organizations Cannot retain data for longer than is required for the purposes for which the information may lawfully be used



New Zealand’s statutory provisions generally do not specify a particular form in which records are to be kept. Tax records may be kept in paper form or electronic form, as long as they comply with the requirements of the Electronic Transactions Act 2002. The Companies Act 1993 (Sec. 190) only requires that records be convertible into written form and that adequate measures exist to prevent falsification of the records.

The legal requirement to retain a paper document in electronic form is met if the electronic form provides a reliable means of assuring the maintenance of the integrity of the information and the information is readily accessible so as to be usable for subsequent reference (Sec. 25 Electronic Transactions Act 2002).

Retention location

Company records must be kept in a place in New Zealand (Sec. 189 Para. 3 Companies Act 1993). If company records are not kept at the company’s registered office, notice must be given to the Registrar of Companies (Sec. 189 Para. 4 Companies Act 1993). Accounting records of a company do not have to be kept in New Zealand and may be located overseas (Sec. 195 Para. 1) with notification to the Registrar of Companies. Tax records must kept in New Zealand but, with the Commissioner of Inland Revenue’s prior authorization, may be stored offshore (Sec. 22 Tax Administration Act 1994).

14.4 Sanctions

Responsible persons

The board of the company is responsible for data retention (Sec. 194 Companies Act 1993). The taxpayer is responsible for data retention of tax records to enable the Commissioner of Inland Revenue to readily ascertain the amount of tax payable and all other tax matters relating to that taxpayer (Sec. 22 Para. 2 Tax Administration Act 1994).


If a company fails to comply with company data retention, both the company and every director commit an offense (Sec. 189 Para. 5 Companies Act 1993), punishable on conviction by fines not exceeding NZ$10,000. Where the board of a company fails to comply with the requirement to keep accounting records, every director commits an offense and is liable to a fine not exceeding NZ$10,000 (Sec. 373 and 374 Companies Act 1993).

Practice

Where insufficient tax records are retained and the taxpayer becomes subject to an audit by Inland Revenue, it will become very difficult to challenge a reassessment from the Commissioner of Inland Revenue.


15 Norway


General provisions

The main legal provisions on data retention in Norway are the Bookkeeping Act (Bokføringsloven) of 19

November 2004 no. 73 Sec. 13 and 13 b. and the Bookkeeping Regulation (Bokføringsforskriften) of 1

December 2004 regarding the methods to be used in bookkeeping and temporary storage of

bookkeeping material outside Norway. From 1 February 2014, the general retention period is reduced

from 10 to 5 years. Another relevant legal instrument is the regulation regarding risk management and

internal control (Forskrift om risikostyring og internkontroll) of 22 September 2008 Sec. 8.


• Money Laundering Act, Sec. 22

• Audit Act, Sec. 5—7

• Limited Liability Companies Act, Sec. 4—7

• Tax Assessment Act, Sec. 4—12



As a general rule, the data retention period is 3.5 years to 10 years. The data retention period for

bookkeeping material is normally 5 years, while other documentation related to bookkeeping, such as

agreements, correspondence and price lists, must be retained for 3.5 years.


Incorporation documents and minutes from board meetings and shareholders meetings must be on

paper and signed. They must be kept as long as the company exists. Employee records should be kept as

long as the employee is employed and for the following three years. Notwithstanding the new 5-year

retention period in the Bookkeeping Act Sec. 13, specifications related to mandatory accounts or

recorded details that are necessary to prepare such specifications of mandatory accounts,

documentation of recorded details and deleted details, documentation of the audit trail, etc., and

documentation of the balance sheet documents (see document groups number 2 and 3 below), must still

be retained for 10 years if the documentation was to be kept before 1 February 2014.



Annual accounts, annual reports and auditors’ reports 5 years

Specifications related to mandatory accounts or recorded details that are necessary to prepare such specifications of mandatory accounts

5 years

Documentation of recorded details and deleted details, documentation of the audit trail, etc., and documentation of the balance sheet

5 years

Numbered letters from the auditors 5 years

Tax return files 10 years

Other documents Generally 10 years

Agreements pertaining to the activities, with the exception of agreements of minor importance

3.5 years

Correspondence that provides material additional information in relation to a recorded detail

3.5 years

Outgoing packing slips or corresponding documentation that accompanies the goods or is otherwise sent to the purchaser

3.5 years

Sven Skinnemoen Email: [email protected]

Tel: +47 2400 22 80



Price specifications required to be prepared pursuant to statutes or regulations 3.5 years

Employee records Duration of employment plus 3 years

Documentation related to obligations in the Money Laundering Act 5 years

Shareholder register, information about previous shareholders 10 years



Both hard copies and electronic files are permitted data carriers. Original accounting materials may be

replaced upon the transfer of accounting details to other media, provided that the scope for verifying

mandatory accounts during the storage period of such accounting materials is not reduced.

The materials to be recorded should be stored in a well-organized manner and be adequately

safeguarded against destruction, loss and amendment. The materials should be available to government

inspection bodies throughout the storage period in a form that facilitates verification. The accounting

materials should be available in a readable format and it must be possible to print them on paper

throughout the storage period.


Incorporation documents and minutes from board meetings and shareholders meetings may be

produced electronically, but must be printed out on paper and signed. The shareholders register must be

available at the company’s business address. It may be paper or electronic.

Retention location

In general, accounting materials should be stored in Norway. Bookkeeping may be carried out on a

server located outside Norway. Provided that certain requirements are met, electronic files containing

accounting materials may be stored in other EU countries.

15.4 Sanctions

Responsible persons

The retention of documents is the responsibility of the general manager or the board of directors.


Sanctions are currently regulated in the Bookkeeping Act Sec. 15. However, the provision will be

amended to refer to the Norwegian General Civil Penal Code when the new code enters into force for

serious breaches of the law. The intentional or negligent material violation of the Bookkeeping Act, or

any regulations laid down pursuant to the Bookkeeping Act, is punishable by fines or imprisonment of up

to three years. If there are especially aggravating circumstances, imprisonment of up to six years may

be imposed. Any other intentional or negligent violation is punishable by fines or imprisonment of up to

three months. The penalties for aiding and abetting are the same.

If anyone convicted has previously been penalized for similar violations, the penalty may be increased by

up to one half or to imprisonment of up to six months. The limitation period can nevertheless not be

extended by more than five years pursuant to the present provision.

Practice

Violations of retention duties are usually prosecuted in connection with tax and VAT violations, often in

connection with bankruptcy or liquidation processes.


16 Poland


General provisions

There is no general regulation regarding data retention in Poland. The main legal regulations influencing

data retention are the Bookkeeping Act of 29 September 1994 and the Personal Data Protection Act of

29 August 1997.


Special legal provisions are applicable to the particular areas of business activity. The most important

regulations are: the Tax Ordinance Act of 29 August 1997; the National Archive Resources and Archives

Act of 14 July 1983; the Labor Code of 26 June 1974; the Social Security System Act of 13 October

1998; the Civil Code of 23 April 1964; the Insurance Activity Act of 22 May 2003; the Transactions on

Financial Instruments Act of 29 July 2005 and the Act on Prevention of Money Laundering Practices

and Financing of Terrorism of 16 November 2000.



There is no general rule in Polish law that stipulates the data retention period. There are different rules

and periods for different types of data and the business activities that the data is related to. Retention

periods in Poland usually range from 5 years (e.g., tax records) to 10 years (in relation to the

prescription period of claims resulting from a civil agreement), but in specific cases may be even longer.


Employment records need to be retained for the duration of employment and for 50 years from the day

of the termination of employment or from the day of the document’s creation. Approved annual financial

statements should be kept permanently. Personal data needs to be retained no longer than is necessary

to achieve the goal of data processing.


All documents are categorized by Polish law depending on the area of their use. Please note, that in the table below on documents and retention periods, the retention of some documents is not obligatory, but has been indicated because of the high practical significance of the retention.



Employee records 50 years

Contracts and agreements Duration of contractual relationship plus the period of the prescription of claims; i.e., in general, 10 years or 3 years for claims related to business activity and for claims concerning periodical performances

Tax records and related documents (i.e., bills, evidences, internal documents)

Prescription period of tax obligations, generally 5 years from the end of the calendar year in which the tax obligation arises

Documents required by bookkeeping rules (i.e., accounting records, including accounting records of liquidated entity)

Generally 5 years (in some cases, shorter, i.e., documents related to the statutory warranty and related complaints — 1 year)

Approved annual financial statements Permanently

Documents related to social securities’ payments 5 years

Insurance documents Prescription period of claims related to insurance agreements

Agnieszka Talasiewicz Email: [email protected]

Tel: +48 22 557 72 75



(generally 3 years)

Documents related to conducting the broker activity 5 years after the cessation of brokering business

Documents relevant for court litigation or tax cases At least till the end of the proceedings

Money laundering prevention documents and registers 5 years

Personal data No longer than is necessary to achieve the goal of the data processing



There is no general rule regarding permitted data carriers. Unchangeable data carriers, such as paper,

CD-ROM and DVD-ROM, as well as changeable data carriers, such as hard disc and tape, are deemed

permitted data carriers. Special regulations can require other conditions.


Due to the fact that most of the activities related to the employment relationship require a written form

(including employment agreements and resolving employment contracts), employee records cannot be

kept only in electronic form and the paper form is required.

Retention location

There is no one general rule regarding the location of retained data; it depends on what type it is. For

example, accounting documents should be retained at the company’s registered office; however, the

documentation can also be stored elsewhere by an entity that specializes in providing services in the

field of document filing. In the case of transfer of personal data outside the EU, special provisions

regarding the protection of the data must be met.

16.4 Sanctions

Responsible persons

The proper retention of a company’s documents is the responsibility of the board of directors; however,

responsibility to retain data can be additionally delegated to a specialized entity or designated person

that provides specific services or is responsible for a particular department in the business’s structure.


The sanctions that result from the violation (civil, penal or administrative) of the data retention

regulations depend on the subject of the retained data and the scope of the business activity. For

example, according to the Act on the Prevention of Money Laundering Practices and the Financing of

Terrorism, a failure to record a transaction that is a subject of this regulation may result in a fine or

imprisonment of up to three years. Pursuant to the Labor Code, an employer who does not keep the

employment documentation and personal files of employees is liable to a fine of between PLN1,000 and

PLN30,000.

Practice

The court practice with regard to violations of retention obligations is rather limited. However, proper

retention of data is important, especially in the context of court litigations, as the documentation should

be retained in order to be used as evidence of the conclusion of a contract and its content. The execution

of the document’s retention obligations related to tax and accountancy documents is, in practice,

verified during the tax and fiscal control proceedings.


17 Romania


General provisions

The main provisions with respect to data protection and retention are included in Accountancy Law no.

82/1991, which applies to accounting documentation, and National Archives Law no. 16/1996, which

provides the framework for archiving documents with historical importance not regulated by other

special laws.


Special provisions with respect to document retention are included in the following regulations:

• Accountancy Law no. 82/1991

• Order no. 3512/2008 on financial accounting documents, approving the Methodological Norms for drafting and using financial accounting documents

• Companies Law no. 31/1990

• Fiscal Code



As a general rule, accounting and fiscal records need to be retained for a period of between 5 and 10

years from the end of the financial year for which they were drafted.


Article 25 of Accountancy Law no. 82/1991 establishes the obligation to archive payrolls for a period of

50 years from the end of the financial year for which they were prepared.

Financial accounting documents attesting the provenance of certain assets having a life period longer

than 10 years should be saved, as a general rule, for a longer period, specifically for the period the

respective assets are used.


Romanian law does not provide for a general retention term. Such a period differs according to each

category of documents for which the specific legislation provides a retention obligation.



Financial statements 10 years

Payroll documents 50 years

Primary documents (invoices, receipts, payment orders, bank statements, contracts, etc.) 5 years

Secondary documents (accounting records, accounting registers, sales registers, petty cash registers, etc.)

10 years

Tax returns (VAT return, profit tax return, payroll taxes returns, etc.) 5 years

Corporate records 5 years

Dragoș Radu Email: [email protected]

Tel: +40 21 402 41 00




Generally documents are maintained as hard copies. However, in certain cases, the archiving can also be

done electronically (e.g., invoices) but only by authorized service providers.

Retention location

As a general rule, accounting and fiscal documents should be retained at the headquarters of the

company.

17.4 Sanctions

Responsible persons

The director of the company is liable for the proper retention of documents. In addition, the persons who

have drafted, endorsed and approved the registration of financial documents, as well as those who have

actually proceeded to registering specific operations are liable for the accuracy of the documentation

supporting such registration.


Failure to observe the rules for document retention is generally considered to be an administrative

offense and is sanctioned with fines — provided that such failure does not constitute a criminal offense.

Practice

If, during a tax audit, the fiscal authorities discover that relevant documents are missing, or not archived

as per the law, the tax claim may be assessed based on estimation.


18 Russia


General provisions

Data retention legislation consists of a set of different federal laws, providing data retention in different

areas of business and social life. General rules on data retention are regulated in the federal law On

Archiving in the Russian Federation, № 125-ФЗ, 22 October 2004. In addition, another set of rules is

provided in specific laws regulating different areas of business (accounting, tax, corporate governance,

etc.). Currently some rules of Russian data retention law are rather contradictory and are open to

different interpretation by lawyers and state authorities.

The general principals of the Russian data retention legislation are as follows:

• Data retention is performed in hard copy.

• Data retention should be performed locally in Russia.

• Russian law prescribes specific terms for retention of different categories of data.

As a general rule, the penalty for non-compliance with data retention rules is only nominal at up to

RUR500 (approximately €12) for violation. However, in some specific areas of data retention regulation

(e.g., corporate governance data), the penalty can be increased up to RUR300,000 (€7,500).


The most important special provisions are set forth in: the federal law On Accountancy, № 402-ФЗ, 6

December 2011; the tax code; the federal law On Personal Data, № 152-ФЗ, 27 July 2006; as well as in

federal laws regulating different types of legal entity (e.g., the federal law On Limited Liability

Companies, № 14-ФЗ, 8 February 1998, and the federal law On Joint Stock Companies, № 208-ФЗ, 26

December 1995).

These provisions provide special regulations and specific requirements concerning data retention for

respective areas of business. Exact periods of data retention in different areas of business are specified

in the Decree of the Ministry of Culture of the Russian Federation № 558, 25 August 2010.



Russian law has no general rule that directly stipulates data retention periods. There are different rules

and periods (from 1 year to 75 years) for different kinds of documents. Some documents should be

retained permanently. However, in most cases (e.g., most accounting documents) the retained period

stated by law is five years. Therefore, in practice, the general period for data retention in Russia is

five years.

Categories of document to be retained

All documents are categorized by Russian law according to the area of their use. However, the

peculiarities in legal regulation for different categories of documents generally concern the period of

data retention. Other specific requirements related to different categories of documents are usually

similar.

Igor Nevzorov Email: [email protected]

Tel: +7 812 703 7800




Accounting documents 5 years

Documents for tax purposes 4 years

Corporate governance documents 5 years, some documents permanently

Advertising materials Up to 5 years

Contracts and contractually supported documents (acts, invoices, etc.) Up to 5 years

Public relation documents Up to 5 years

HR documents and documents with data related to employees Up to 75 years

Documents concerning business on the securities market 5 years, some documents permanently



As a general rule, all documents should be retained in hard copy.


Generally, electronic data retention (without proper hard copy) is not permitted. At the same time, as an

exception, it is possible to retain in electronic form tax return documents and invoice pro forma (счет-

фактура) documents (i.e., specific documents necessary for VAT calculation and accounting).

Retention location

Generally, all hard copies should be stored in Russia, unless a value estimation can be performed or state authorization is obtained to transfer them to foreign countries and to retain them outside Russia.

18.4 Sanctions

Responsible persons

Generally, the CEO of a company is responsible for ensuring the company is in line with document

retention rules. CEOs can be brought to criminal liability (if the violation of data retention law is

connected with any serious crime) or administrative liability (e.g., penalty) if there is any legislation

violation. A company itself can also be brought to administrative liability (e.g., penalty) in the case of

legislation violation.

General sanctions in the case of violation

Generally, the Russian Code on administrative offenses provides a penalty for violation of archive

document retention rules — up to RUR500 (€12). However, in some specific areas (e.g., corporate

governance and stock trade), the penalty can be far greater — up to €300,000 (i.e., up to €7,500) for

each violation of data retention rules.

Practice

Russian court practice is currently not extensive. There are only a few cases concerning such violations of data retention rules. The largest penalty that can be found in court practice due to data retention violation is about RUR200,000 (ca.€5,000) and is in relation to corporate governance and stock market data retention.


19 Singapore


General provisions

There is no general legal provision under Singapore law that stipulates a data retention period. The main

legal provisions are contained in the Companies Act (Cap. 50), the Income Tax Act (Cap. 134), and the

Goods and Services Tax Act (Cap. 117A). The Limitation Act (Cap. 163) is also important as it imposes

time limitations on legal action.


• Company accountancy: Sec. 199 of the Companies Act (Cap. 50)

• Tax: Sec. 67 of the Income Tax Act (Cap. 134), Sec. 46 of the Goods and Services Tax Act (Cap. 117A) and Reg. 85 to 87 of the Goods and Services Tax (General) Regulations

• Employment or social security: Sec. 95 and 96 of the Employment Act (Cap. 91), Reg. 2 of the Employment (Register of Employees) Regulations, Sec. 18 of the Workplace Safety and Health Act (Cap. 354A), Reg. 8 of the Workplace Safety and Health (Incident Reporting) Regulations, and Sec. 11 of the Central Provident Fund Rules

• Records by financial institutions: Sec. 36 to 38 of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (Cap. 65A)

• Personal data: Sec. 25 of the Personal Data Protection Act 2012



There is no general rule under Singapore law that stipulates the data retention period. There are

different rules and periods for different kinds of records. In most cases, the retention period stated by

law is five years.


An entity or person may be lawfully compelled to produce to an authority certain documents (e.g.,

pursuant to Sec. 59 of the Telecommunications Act, Sec. 63 to 65 of the Competition Act).

Any document that an entity or person may be lawfully compelled to produce as evidence before a court

of justice or in any legal proceedings must be retained. Furthermore, actions must be commenced within

the periods prescribed under the Limitation Act (Cap. 163). Generally, actions in contract and tort have

a limitation period of 6 years, personal injury actions have a limitation period of 3 years, and actions to

recover land and execute on a judgment have a limitation period of 12 years. Any legal documents that

may be relevant if legal action was to be taken should be retained for at least these periods (e.g.,

contracts should be kept for at least six years).


There are various categories of documents to be retained under the different legislative provisions,

including, but not limited to, company accounting and employment-related documents.



Company’s accounting and other records as will sufficiently explain the transactions and financial position of the company

5 years from the end of the financial year in which the transactions or operations are completed

Income tax documents 5 years from the year of assessment to which any income relates

Mark Wong


Tel: +65 6827 5577



Goods and Services Tax documents 5 years from the end of the prescribed accounting period

Evidence required to support a bad debt relief claim relating to Goods and Services Tax and records of such claims

3 years from the date of the making of the claim

Register of employees Duration of employment

Record of workmen Duration of employment

Documents issued in respect of the workplace by the Commissioner for Workplace Safety and Health, etc.

5 years from the date the records were made or such other period as may be prescribed

Records of notifications and reports of accidents leading to death or injury, etc.

3 years from the time of the notification or report, as the case may be

Records of payments given by the Central Provident Fund Board

2 years from the date on which they were issued

Financial transaction documents 5 years after the day on which the account is closed or the deposit box ceases to be used by the person, or five years after the day on which the transaction takes place

Documents relevant for court litigation At least until the end of the proceedings or expiry of the limitation period

Personal data As soon as it is reasonable to assume that the purpose for which that personal data was collected is no longer being served by retention of the personal data and retention is no longer necessary for legal or business purposes



There is no general rule regarding permitted data carriers. Generally, documents are maintained as hard copies, however the legislative provisions or applicable authorities may specify the form and manner in which records must be kept. In certain cases, documents can also be retained electronically.


Legal documents, such as a company’s memorandum and articles of association and meeting minutes of

the shareholders and directors, should be retained as hard copies.

Retention location

There is no general rule regarding the location of retained data; it depends on what type it is, e.g., a

company’s accounting records should generally be retained at the company’s registered office in

Singapore (if they are kept outside Singapore, returns must be sent and kept at a place in Singapore).

19.4 Sanctions

Responsible persons

The retention of documents is the responsibility of the company, directors and managers.


Fines or imprisonment depending on which statutory provision was breached and other factors such as whether the breach was wilful or fraudulent. In addition, procedural disadvantages (such as expenses claims being disallowed) may result from violations of retention requirements.

Practice

The tax authority in Singapore may review a company’s accounting books, records and financial affairs for the purposes of an audit or investigation. Companies are generally encouraged to use a computerized accounting system to ensure compliance with record-keeping requirements. Furthermore, it is in an employer’s interest to keep records and documents about its employees since employment disputes are common.


20 Spain


General provisions

The most important legal provision regarding data retention in Spain is the Commercial Law. There are

other important legal provisions, such as the Royal Decree 1784/19 July 1996, which concerns

Commercial Registry Regulation (RRM), especially Article 377. There are also other specific Spanish laws

that may state more precise provisions regarding data retention.


Some of the most important special provisions are: Article 66 Spanish Law 58/17 December 2003,

regarding General Tax Law (LGT); Article 21 Royal Decree 5/4 August 2000, regarding Infringement

and Sanctions Social Law (LISOS); Article 25 of Law 10/28 April 2010, regarding the Prevention of

Money Laundering and Financing of Terrorism (LPBCFT); and Article 5 Law 25/2007, regarding Data

Protection in Electronic Communications.



As a general rule, company documentation needs to be retained for six years.


Some documents must be retained for four years (the time limit for action against tax and social security

offenses). Health, safety and medical records must be retained for five years from the date of medical

care, according to Law 41/14 November 2002, which regulates patients’ autonomy, information rights

and obligations (LAP).

Documents concerning Law 10/28 April 2010, on the Prevention of Money Laundering and Financing of

Terrorism (LPBCFT), must be retained for 10 years.

Other considerations

Some legal actions become time-barred after 15 years (if they are related to real estate, after 30 years).

Therefore, it is advisable to retain documents related to loans, credit or property management for

15 years (or 30 years) from the end of the transaction or agreement.



In general 6 years

Accountancy and bookkeeping 6 years

Policies and procedures 6 years

Property management documents 6 years

Internal agreements and internal correspondence 6 years

Banking documents loan- or credit-related documents 6 years

Employee records 4 years

Health, safety, medical records, etc. 5 years

Salary administration 4 years

Incorporation documents, bylaws, etc. 6 years

Meeting minutes (of board of directors, general assembly, etc.) 6 years

Contracts and agreements 6 years after the terms cease

Jose Dominguez Leandro Email: [email protected]

Tel: +34 915 727 200



Claims- or litigation-related documents 6 years

Compliance-related documents 6 years

Tax returns, etc. 4 years

Marketing, sales, pricing and related documents 3 years

Money laundering prevention documents 10 years

Telecommunications data (only applicable for telecommunications operators) 1 year



In general terms, all kinds of data carriers are permitted. However, the most frequently used are paper,

CD-ROM, electronic file and hard disk.


Legal documents, such as incorporation documents, bylaws and meeting minutes (of the board of

directors, general assembly, etc.) must be retained and duly signed as paper-based originals.

Retention location

As a rule, hard copies need to be retained locally, due to tax authority inspections. Specific documents can also be retained outside Spain if the applicable legal requirements are met.

20.4 Sanctions

Responsible persons

In general terms, the proper retention of documents is the responsibility of the directors of the company.

Infringement of legal provisions in this matter does not usually imply sanctions, just civil liability.


Civil liability might occur due to violations of retention requirements.

Practice

There has not been any significant conviction for the violation of data retention requirements in Spain.


21 Switzerland


General provisions

The main legal provisions regarding data retention in Switzerland are stated in the Swiss Code of

Obligations (SR 220, CO) Articles 957 et seq and in the Ordinance on the Management and Record of

Accounting Books (SR 221.431).


The most important special provisions are Article 70 and Article 42 of the Swiss Value-Added Tax Act.

Furthermore, various other acts contain specific rules dealing with retention requirements; for example,

social security law, customs requirements, product declaration and environmental law.



As a general rule, documents need to be retained for 10 years.


related to VAT should be retained for 10 years from the end of the tax period in which the

tax claim arose (i.e., a maximum of 11 years following receipt of the invoice) and, according to the Swiss

Federal Tax Administration’s recommendation, up to 26 years if they are also real estate-related (i.e.,

accounting records in connection with the calculation of a subsequent input tax deduction and own use

of immovable goods).

However, some documents related to former employees (e.g., ratings and performance measurements)

must be deleted within shorter periods (e.g., 6 to 18 months).

Since the beginning of the financial year 2015 (for consolidated statements the beginning of the

financial year 2016 is relevant), there is no longer a strict legal requirement to retain business

correspondence from an accounting perspective (Articles 957 to 963b Swiss Code of Obligations).

However, irrespective of this facilitation of retention requirements, business correspondence

representing a partial or complete accounting voucher — i.e., business correspondence providing

evidence for a commercial transaction — must be retained. In addition, the loss of evidence as a

consequence of destroyed business correspondence is of substantial importance — a fact that might

result in retention of such documents until the statute of limitation of related rights is reached. Further,

depending on the particular case, other legal provisions may apply that still require retention of business

correspondence.


Documents that must be retained include:

• Books of account

• Accounting vouchers

Gabor Sebestyen


Tel: +41 58 286 41 03




Generally 10 years

Some HR files (ratings, job applications, etc.) Potentially less than 10 years

VAT 10 years

VAT related to real estate Up to 26 years



Permitted data carriers are unchangeable data carriers, such as paper, CD-ROM, DVD-ROM and

microfilm. Changeable data carriers, such as hard disk and tape, are also permitted, if further

requirements are met (in particular, the integrity of the document needs to be ensured).


Annual financial statements, profit-and-loss accounts and the audit-attest statement have to be retained as signed, paper-based originals. Securities must be retained as paper-based originals. Documents of an approved electronic-invoicing system must be retained in electronic form.

Retention location

As a rule, documents can also be retained outside Switzerland if all applicable legal requirements are

met. In particular, data protection rules must be respected.

21.4 Sanctions

Responsible persons

Ultimately, the members of the board of directors are responsible for legally compliant document

assessed (which is not likely, as document retention is ultimately the responsibility of the board of

directors).


Fines or imprisonment of up to three years; In addition, civil liability and procedural disadvantages might result from violations of retention requirements.

Practice

Statistics show that there are few convictions for the violation of data retention requirements according to Articles 166 and Article 325 of the Penalty Code.

In daily business, criminal sanctions are rarely imposed; however losses of evidence and, as a consequence, procedural disadvantages are of much more significance than criminal sanctions. In addition, the tax audits conducted on a regular basis by Swiss firms are very relevant in this context. If tax inspectors discover that documents relevant for tax purpose are not traceable or stored as requested by law, they will assess the tax claim based on an estimate.

Between 1960 and 2009, around 1900 people were convicted for failure to keep and preserve proper business records Article 166. Compared to the total number of inhabitants, this is an extremely low number of convictions.


22 Turkey


General provisions

The main legal provisions regarding data retention in Turkey are the Turkish Commercial Code no. 6102

and the Tax Procedures Code no. 213. In addition, there is a draft code on data protection that is

expected to be codified in the near future, but is still pending.


The most important special provision is the Labor Code, with no. 4857 regarding employment-related

documents.



There is no general rule in Turkish law that stipulates the data retention period. There are different rules

and periods for different kinds of records and documents.


The documents related to construction and auxiliary work lasting more than a year, documents related

to amortization expenses, investment incentives, previous year’s losses and withholding tax paid by

companies, must be retained without being subjected to the time periods mentioned below.



Commercial books 10 years*

Inventories 10 years*

Opening balance sheet 10 years*

Intermediary balance sheet 10 years*

Financial statements 10 years*

Annual reports 10 years*

Commercial letters and correspondence 10 years*

Documents required to be kept under Tax Procedures Code (records, invoices, receipts of liberal professions, entries and vouchers concerning wages)

5 years from the calendar year following the year to which they refer

Employee records and documents 10 years starting from the date of issuance

*The 10-year period starts from the end of the calendar year in which the document is issued.



As a general rule, documents should be retained as hard copies. However, a company may keep its

commercial books and commercial records within an electronic environment.

There are no important exceptions to this general retention form.

Retention location

There is no specific provision on the location of data. However, the documents are required to be

submitted to the officers in the event of an inspection (i.e., tax inspection).

Mehmet Kucukkaya


Tel: +90 212 315 30 00


22.4 Sanctions

Responsible persons

Commercial books must be retained by the merchants, and tax-related documents must be retained by

the person(s) who are obliged to keep books under the Tax Procedures Code (i.e., companies, merchants

and independent merchants).

In addition, employee records and documents must be retained by the employers.


• An administrative monetary fine of TRY4,000 for not retaining commercial-related documents (retention period of 10 years). Such fine is issued by the tax officers for the tax-related records and documents.

• An administrative monetary fine of TRY1,113 for not retaining employee records and documents.

Practice

The sanctions for not complying with obligations on the retention of commercial records and books are

fairly new under the Turkish Commercial Code. Therefore, there is not much case law available.

However, tax inspections are quite common in Turkey and the tax officers may ask to see the documents

that should have been retained.

It is in the employers’ interest to keep the records and documents about its employees, since there are

many disputes between employer and employee, and there is much case law on this topic.


23 United Kingdom


General provisions

The main legal provisions regarding data retention in the United Kingdom are contained in Sec. 5 of the

Limitations Act 1980; Sec. 248, 355, 388 and 702 of the Companies Act 2006; Sec. 12B of the Taxes

Management Act 1970; Sec. 11 of the VAT Act 1994; Sec.1 of the Consumer Protection Act 1987 and

Sec. 4 of the Data Protection Act 1998, which creates a general statutory duty for data controllers to

comply with the act including the responsibility not to retain data in personal and identifiable form longer

than it is necessary to fulfil the purpose for which these were collected.


The Companies Act 2006 provides specific provisions with regard to the creation of obligations to create

and maintain records, as well as to their location, in order to ensure these can be produced when

required. In particular, the act requires for precautions to be taken against the falsification of records

(Sec. 1138). The Data Protection Act 1998 imposes statutory duties to implement security measures as

regards the entire life cycle of personal data. In addition, Sec. 3 of the Public Records Act 1958 creates

a statutory duty of care for public records that are considered of historical value to ensure these are

appropriately selected, retained and transferred safely for permanent preservation.



There is no general rule that provides for data retention periods applicable to all types of data. The data

retention periods vary in relation to the nature of the record, the activity concerned and the respective

industry in which these are processed. Retention periods vary from one year to indefinite (e.g., there is

no limitation for claims for fraudulent breaches of trust).


A number of categories of data that need to be retained are explicitly stipulated in law such as general

company records, tax and accounting records, payroll and salary records, employment and pension

records and legal files and contracts.



Company accounts, books and records 3 years for private companies; 6 years for public companies

Board of directors meetings and resolutions 10 years

Contract relating to company purchase of its own shares 10 years

Tax and accounting records Fifth anniversary of the 31 January, following the year of the assessment, where the return is for a tax year

VAT records, accounts and correspondence 6 years

Wages, salary and other payroll records 6 years

Employment contracts 6 years

Exposure to hazardous substances monitoring records Minimum 5 years; up to 40 years

Legal contracts and agreements 6 years

Pension records Summary of record retained between 70 and 85 years after year of birth depending on pension scheme requirement.

Mark Brown


Tel +44 20 7951 7519

mailto:[email protected]




Sec. 1135 of the Companies Act 2006 specifies that company records may be retained in hard copy or

electronic form and arranged in any manner the company director thinks fit. Where the data is held in

electronic form it is specified that the data must be capable of being reproduced in hard copy.

In addition, the Civil Evidence Act 1995 governs the admissibility of documents in civil proceedings. Sec.

8 of the Civil Evidence Act 1995 stipulates that where the original document may not be produced, a

copy of the original document may be accepted if authenticated in a manner as the court may approve.

Where records have been digitized, the requirement is therefore to prove that the electronic record is a

true and unaltered copy of the original hard copy. British Standard 10008 on Evidential Weight and

Legal Admissibility of Electronic Information is considered to provide best practice for the processes and

procedures used to digitize data.


It is required that a number of legal documents and contracts have to be drafted in writing. In addition,

the original documents must be kept for all tax-related matters. However, this does not mandate that the

document must be in paper format provided the original copy can be reproduced from the electronic

copy.

Retention location

In general, documents must be retained in the United Kingdom. Sec. 388 of the Companies Act 2006

stipulates that company records must be kept at the company’s registered office or where the directors

think fit and be available for inspection and where these are kept outside the United Kingdom the

records must be sent and kept at a place in the United Kingdom and be open to inspection. In addition,

with regard to personal data, the Data Protection Act 1998 prohibits the transfer of personal data

outside the EU, unless adequate safeguards exist to protect the security of the data in the country of

transfer.

23.4 Sanctions

Responsible persons

A duty to keep accounting records is placed upon the company officer who is in charge of this obligation

under Sec. 386 of the Companies Act 2006. Sec. 4 of the Data Protection Act 1998 places a duty on the

data controller of the personal data to comply with the data protection principles, including the retention

of data in compliance with the law.


Failure to keep accounting records for the specified period, and at the specified location, may result in

imprisonment for a period of up to two years or a fine, or both (Sec. 389 Companies Act 2006). The

information commissioner may also impose sanctions on data controllers for failing to comply with the

Data Protection Act 1998 including fines up to £500,000.

Practice

There is little court practice with regard to violations of data retention rules. Where tax records are

absent, there is a risk that tax will be calculated based on estimates that could be to the detriment of the

taxpayer and lead to the imposition of penalties. The information commissioner has imposed several

penalties for losses of personal data.


24 Contacts

Country Contact

Albania Email: [email protected]

Tel: +355 4 24195 70

Austria Email: [email protected]

Tel: +43 1 26095 2140

Belgium Email: [email protected]

Tel: +32 2774 9457

China Email: [email protected]

Tel: +86 21 2228 8428

Estonia Email: [email protected]

Tel: +372 611 4578

Finland Email: [email protected]

Tel: +358 50 322 3809

France Email: [email protected]

Tel: +33 1 55 61 10 05

Germany Email: [email protected]

Tel: +49 89 14331 25351

Greece Email: [email protected]

Tel: +302102886592

Hungary Email: [email protected]

Tel: +36 1 451 8564

Italy Email: [email protected]

Tel: +39 02 85 14 828

The Netherlands Email: [email protected]

Tel: +31 88 4070018

New Zealand Email: [email protected]

Tel: +64 274 899 090

Norway Email: [email protected]

Tel: +47 2400 22 80

Poland Email: [email protected]

Tel: +48 22 557 72 75

Romania Email: [email protected]

Tel: +40 21 402 41 00

Russia Email: [email protected]

Tel: +7 812 703 7800

Singapore Email: [email protected]

Tel: +65 6827 5577

Spain Email: [email protected]

Tel: +34 915 727 200

Switzerland Email: [email protected]

Tel: +41 58 286 41 03

Turkey Email: [email protected]

Tel: +90 212 315 30 00

United Kingdom Email: [email protected]

Tel: +44 20 7951 7519























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