Legal analysis: 1 According to Article 44 of the Implementation Regulations of the Enterprise Income Tax Law of the People's Republic of China and the People's Republic of China: Eligible advertising expenses and business promotion expenses incurred by enterprises, except for the financial and taxation authorities of the State Council, Except as specified.
2 The amount not exceeding 15% of the current year’s sales operating income is allowed to be deducted, and the excess is allowed to be carried forward for deduction in subsequent tax years.
3 Supplementary provisions of Finance and Taxation Document No. 2009/72: For cosmetics manufacturing, pharmaceutical manufacturing and beverage manufacturing, excluding alcohol manufacturing companies, advertising and business promotion expenses incurred by enterprises shall not exceed 30% of the sales revenue of the current year. A partial deduction is allowed, and the excess is allowed to be carried forward as a deduction in subsequent tax years.
4 Tobacco advertising and business promotion expenses incurred by tobacco companies shall not be deducted when calculating taxable income.
Legal basis: "Enterprise Income Tax Law of the People's Republic of China" Article 44 An enterprise does not provide information on business transactions with its related parties, or provides false or incomplete information, failing to provide truthful information. If it reflects its related business transactions, the tax authorities have the right to determine its taxable income in accordance with the law.