The funds for party building activities cannot be deducted from the input tax. Activity funds generally belong to communication and personal consumption, and cannot be deducted from input tax.

Article 27 of the Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Comprehensively Promoting the Pilot Project of Changing Business Tax to VAT (Caishui [2016] No.36) stipulates: "The input tax of the following items shall not be deducted from the output tax:

(1) Goods purchased, processing, repair and replacement services, services, intangible assets and real estate used for simple taxable items, items exempted from value-added tax, collective welfare or personal consumption. The fixed assets, intangible assets and real estate involved only refer to the fixed assets, intangible assets (excluding other equity intangible assets) and real estate dedicated to the above projects.