# Commencement to Trade - definition needed



## DB74 (27 Nov 2009)

Can somebody give me a link to how Revenue define this phrase

I am 99% sure that Revenue define it as when a company has its first actual sale and that all expenses prior to this sale are therefore defined as pre-trading expenses but I can't find anything on the website


----------



## Graham_07 (27 Nov 2009)

Is this any good ( sorry will have to copy & paste link to address bar, can't seem to get it direct. )

www.*revenue*.ie/en/about/foi/s16/income-tax.../04-06-08.pdf 


Just noticed doesnt seem to work from copy / paste. 

Put in the following into google "pre-trading expenses" and the first item that comes up is from IT/CGT manual from FOI Act


----------



## DB74 (27 Nov 2009)

No - it just says how to treat pre-trading expenses - I need to know how Revenue define the actual commencement date.


----------



## Setanta12 (27 Nov 2009)

This is what could be described as a 'question of fact', every trade is different.

To my mind, the purchase of stocks to sell as opposed to purchase of assets to carry out selling, would constitute commencement to trade, or opening your doors to the public, or advertising to the public or first sale (whether or not cash was received).


----------



## Graham_07 (27 Nov 2009)

I can't find any specific source on this either, however the date of first sale would not seem unreasonable an would be my own expectation. In the case of a pub, the first pint sold might determine actual commencement.  However what then in the case of , say , a kitchen fitter. Obviously direct costs such as materials of first sale would be allowable so is the date of first purchase of direct materials the date of commencement? I think a Revenue answer is needed if you need to tie it down very specifically.


----------



## DB74 (27 Nov 2009)

My query is in relation to the "proposed" 3-year tax free period for new companies.

One of the criteria is that the new company must "commence to trade" in 2009 so unless Revenue specify what the phrase actually means then, assuming the scheme gets the go-ahead (and it's a big assumption), a clearer definition will be required.


----------

