According to the Enterprise Income Tax Law of People's Republic of China (PRC), the tax treatment of expenses deducted in previous years.

The expenses actually incurred in the previous year that should be deducted before the enterprise income tax according to the tax regulations are allowed to be deducted retroactively until the annual calculation of the project after the special declaration and explanation (list) of the enterprise, but the period of retrospective confirmation shall not exceed 5 years.

The enterprise income tax overpaid for the above reasons can be deducted from the enterprise income tax payable in the year of retrospective confirmation. If the deduction is insufficient, it can be postponed or applied for tax refund in future years.

Where a loss-making enterprise makes up the expenses that were not deducted before the enterprise income tax in the previous year, or a profit-making enterprise incurred losses after making up the expenses, it shall first adjust the losses of the year to which the expenses belong, and then calculate the overpaid enterprise income tax in subsequent years according to the principle of making up the losses, and deal with it in accordance with the provisions of the preceding paragraph.