Are pre-operating expenses or business start-ups incurred by the company, allowed for deductions from gross business income?

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Accepted Answer

In general, pre-operating or pre-business expenses of a person are not allowed as a deduction from gross business income because those expenses are not everything and are solely intended to generate that income. However, Schedule 4B of ITA 1967 and the Rules issued by the Minister of Finance namely PU (A) 61/1992, PU (A) 111/1995, PU (A) 160/1996, PU (A) 475/2003, PU (A) A) 472/2005, PU (A) 135/2006, PU (A) 65/2007, PU (A) 361/2008, PU (A) 401/2009 and PU (A). 76/2012 authorizes deductions for certain expenses incurred prior to commencement of operations or business.

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Question: Are pre-operating expenses or business start-ups incurred by the company, allowed for deductions from gross business income?