News + Events
Deduction Ceiling of Advertising and Publicity Expenses Readjusted - 财政部、国家税务总局调整部分行业广告费和业务宣传费税前扣除政策
September 10, 2009
Released on July 31, 2009, and effective from January 1, 2008, to December 31, 2010
The Ministry of Finance (“MOF”) and the State Administration of Taxation (“SAT”) readjusted the deduction ceiling of advertising and publicity expenses incurred by the enterprises in certain industries.
• The advertising and publicity expenses incurred by a manufacturer in the cosmetics, medicine and beverage (excluding alcohol) industries can be deducted if not exceeding 30% of the annual sales revenue. The excess may be carried forward to future years for deduction.
• For beverage manufacturers employing the business mode of franchise, the beverage brand users as a franchisee can have its expenses for advertising and publicity, if not exceeding 30% of its annual sales revenue, deducted by itself, or by beverage brand holders or controllers in whole or in part as sales expenses before filing EIT tax returns. When beverage brand holders or controllers calculate pre-EIT deduction limits for its own advertising and publicity expenses, the portion of advertising and publicity expenses collected from franchisees may be deducted from its own.
• The advertising and publicity expenses incurred by the enterprises in the tobacco industry shall not be deducted when filing EIT tax returns.
• This Circular is retroactively effective from January.1, 2008, and expires on December 31, 2010.