1, the profit rate before interest and tax on sales = earnings before interest and tax/sales revenue, and earnings before interest and tax = net profit of the enterprise+interest expenses paid by the enterprise+income tax paid by the enterprise;

2. The profit rate before interest and tax on sales is the ratio of the earnings before interest and tax of the enterprise to the current operating income, which is usually expressed as a percentage to reflect the profitability of the enterprise. The greater the profit rate before interest and tax on sales, the stronger the overall profitability of the enterprise;

3. Fair transaction price = reasonable cost of related party transactions *( 1+ comparable non-related transaction cost plus rate).

Allowable deductions before enterprise income tax are:

1, reasonable wages and salaries incurred by the enterprise are allowed to be deducted;

2. Pre-tax deduction of social insurance premiums;

3. Pre-tax deduction of employee welfare expenses;

4. The business entertainment expenses related to the production and business activities of the enterprise shall be deducted according to 60% of the amount incurred, but the maximum amount shall not exceed 5 ‰ of the sales (business) income of the year;

5. Unless otherwise stipulated by the competent department of finance and taxation of the State Council, the eligible advertising expenses and business promotion expenses incurred by the enterprise shall be deducted if they do not exceed 0/5% of the sales (business) income of the current year; The excess shall be allowed to be carried forward and deducted in future tax years;

6. Interest expenses incurred by enterprises in production and business activities are allowed to be deducted; The interest expenses of non-financial enterprises borrowing from non-financial enterprises shall not exceed the amount calculated according to the interest rate of similar loans of financial enterprises in the same period.

To sum up, the profit rate before selling interest is an important indicator to measure the operating efficiency of an enterprise, which reflects the profit level achieved by each unit of sales income of an enterprise. A higher profit rate before interest and tax usually means that an enterprise has better operating efficiency and can manage costs and expenses more effectively. There may be differences in the profit rate before interest and tax between different industries and enterprises, which need to be analyzed and compared in combination with specific conditions.

Legal basis:

"Measures for the implementation of mutual consultation procedures for tax agreements" Article 12

The provincial tax authorities responsible for the collection and management of the applicant's personal income tax or enterprise income tax are the tax authorities that accept the application. Where the applicant applies for mutual consultation on the non-income tax levied by the other contracting party, the provincial tax authorities responsible for the collection of domestic taxes identical or similar to the tax shall be the tax authorities that accept the application. If the same or similar taxes are not levied in China, the provincial State Taxation Bureau shall be the tax authority that accepts the application.