you have to justify that you are in the business to make money, not as a hobby ("Liebhaberei").
The IRS operates the same way here, otherwise everyone would be starting up "businesses" for their various hobbies and deducting as much as possible. The Nolo book "Home Business Tax Deductions" is a great primer on all the specific steps one needs to take to ensure their business does not get classified as a hobby by the IRS.
Ultimately if you really have the genuine intent of running a business, you're going to have plenty of evidence to indicate that. But for those curious, I read/own this book and it was very helpful:
http://www.nolo.com/product.cfm/ObjectID/0EB8204C-4889-4C7B-...
This is usually not a concern for most startups, but for people who might be trying to turn their passion/hobby into a money-maker this is a useful guide to ensure you don't get burnt.
The IRS operates the same way here, otherwise everyone would be starting up "businesses" for their various hobbies and deducting as much as possible. The Nolo book "Home Business Tax Deductions" is a great primer on all the specific steps one needs to take to ensure their business does not get classified as a hobby by the IRS.
Ultimately if you really have the genuine intent of running a business, you're going to have plenty of evidence to indicate that. But for those curious, I read/own this book and it was very helpful: http://www.nolo.com/product.cfm/ObjectID/0EB8204C-4889-4C7B-...
This is usually not a concern for most startups, but for people who might be trying to turn their passion/hobby into a money-maker this is a useful guide to ensure you don't get burnt.