Business start-up costs

For an amount to be deducted as an expense incurred for the purpose of gaining or producing income from a business or profession, the taxpayer must have been carrying on business in the fiscal period in which the expense was incurred.

Where a taxpayer proposes to undertake a business and makes some initial expenditures with that purpose in mind, it is necessary to establish whether the expenditure preceded the start of the business or whether the business had in fact begun and there were expenses incurred during preliminary steps leading to the start of normal operations.

Consequently, the date when the business can be said to have commenced must be known.

Forms and publications

• Guide T4002, Business and Professional Income
• Interpretation Bulletin IT-364, Commencement of Business Operations