Vol. 411 No. 1
179 Mr. Noonan (Limerick East) asked the Minister for Finance if his attention has been drawn to the fact that most of the expenses for starting up a business are non-deductible for tax purposes; if he has any plans to alter this situation; and if his attention has further been drawn to the fact that the present policy militates against the establishment of new industry.
Under the Taxes Acts, expenditure which is wholly and exclusively laid out for the purposes of a trade is allowable as a deduction in arriving at profits which are subject to taxation. Unless a trade has commenced, no deductions can generally be claimed for pre-trading expenditure. There are however a number of reliefs which cater specifically for pre-trading expenditure, for example, relief for capital expenditure on scientific research; on construction of an industrial building; on the acquisition of patent rights and "knowhow"; in connection with a mine, and, for abortive exploration, expenditure on mining; on dredging; on the treatment of effluent; and on construction of toll roads and bridges. In addition, relief is available for certain pre-trading expenditure incurred on the recruitment and training of staff.
I am not aware of any recent representations seeking an alteration in the tax treatment of expenses in the start-up of businesses, or claiming that the establishing of new industry is hindered by the current tax treatment. I see no reason to change the present arrangements, especially given the current budgetary constraints.
