January 2026 third edition
This thirteen-page guide explains the factual commencement date and distinguishes it from the first receipt and the section 14R deemed commencement concession. Its cover extraction contains an unrelated REIT heading; the actual document is the commencement guide.
The two elements of commencement
A business normally starts when its profit-making structure is established and its first commercial activity begins. The necessary structure depends on the business: a hotel needs completed premises, fittings and registration before receiving guests. Incorporation, a loan, construction or a preparatory contract alone need not establish commencement.
Evidence to prepare
Describe the main business and its activities; explain its profit-making structure; establish whether ordinary daily operations have begun; and prepare a dated sequence showing operational readiness and the first ordinary business activity. IRAS distinguishes preliminary work from activities forming part of daily operations.
Ordinary deduction and the first-receipt concession
Expenses before actual commencement do not qualify under section 14(1). Separately, the YA2004 enterprise-development concession treats commencement as the first day of the accounting year containing the first business receipt. From YA2012, section 14R also permits qualifying revenue expenses in the preceding year. This does not prevent proving an earlier actual commencement. The separate pre-income-expenses guide supplies the detailed conditions; capital expenditure is not converted into revenue expenditure.
Wholesale and retail: opening to customers
The supermarket incorporated on 1 January 2020, took premises and hired staff on 1 February, stocked shelves on 1 April and opened for sales on 9 April. Commencement is 9 April, rather than the ceremonial opening on 1 June. Offering goods to the public is the operative event.
Hotels: registration permitting operation
Land purchase on 6 January 2019, construction from 1 March and training on 2 June 2020 are preparatory. Application on 1 July is not enough: commencement is the hotel-registration certificate dated 2 August 2020, when the hotel is permitted to operate and receive its first guest.
Manufacturing: commercial production
The component manufacturer incorporated on 2 January 2019, completed its plant on 1 December, obtained licences on 5 December, hired on 8 December, installed machinery on 15 December and trained on 20 December. Materials arrived on 15 January 2020 and trial production occurred on 30 January. Actual commencement is commercial production on 15 February, before the first sale on 25 February. Earlier preparation costs fail the ordinary commencement test.
Property development for sale
A new developer starts when acquiring land or a building to develop for sale. Earlier expenditure is pre-commencement. Land, construction, financing and property-tax costs during development are capitalised as development costs and deducted as cost of sale when the Temporary Occupation Permit is issued, under the treatment described in this guide.
Proprietary clubs: the membership launch
Such clubs are owned by the proprietor rather than members. The illustration buys land on 16 October 2018 and hires/trains on 12 November, but commences on the membership campaign launch of 15 December. Clubhouse construction on 3 January 2019, the first fee on 3 February and facilities opening on 1 April 2020 are later events. Marketing memberships is the income-producing activity, not mere ceremony.
Professional services: readiness to market and contract
The fund manager incorporated on 10 January 2018, set up an office on 15 November and recruited on 30 November. Once equipped to market and contract on 15 March 2019, ordinary business began despite income only arriving on 4 January 2020. Its earlier office/recruitment preparation is distinguished from marketing forming part of normal operations. The 2022 edition updated the section 14R citation and example dates.
Official source
This article independently explains the substantive contents of the official PDF, including the relevant conditions, procedures and annexes. The linked document remains the authoritative source for its original wording, and later changes should be checked separately.
Read the official PDF ↗