China MOF Announces Corporate Income Tax Deduction for Advertisement, Business Promotion Expenses

The Chinese Ministry of Finance Dec. 29 issued Announcement No. 16, on corporate income tax deductions for advertising and business promotion expenses. The announcement includes: 1) a 30 percent deduction limit for advertising and publicity expenses of cosmetics, pharmaceutical, and non-alcoholic beverage enterprises, based on current year sales income, with any excess carried forward and deducted in subsequent tax years; 2) related enterprises with expense sharing agreements can apportion advertising deductions if total expenses don’t exceed the deduction limit and allocated amounts are excluded from the other party’s own limit; and 3) tobacco advertising and business promotion expenses aren’t deductible. ...