Legal analysis: According to Article 49 of the Implementation Regulations, royalties paid between internal business organizations of an enterprise shall not be deducted before tax. Because the enterprise income tax law adopts enterprise income tax, the branches of enterprises are part of the general organization of enterprises, not independent entities, and cannot be used as independent enterprise income tax taxpayers. The unified representative of the head office of an enterprise shall collect and pay taxes. In the actual business process, due to the needs of management and production and operation, enterprises may adopt relatively independent internal branch management, and branches have relatively independent assets and business scope within the head office of enterprises, which may make these branches provide so-called management services similar to those between independent enterprises, such as paying trademark use fees. However, such business activities between branches within an enterprise belong to internal business activities. When paying enterprise income tax, because they are not independent enterprise income tax payers, they need to pay taxes by enterprises, so the expenses arising from these internal business transactions are not included in the income and deducted as expenses. In other words, the trademark use fee between the branch and the head office does not need to be included in the income of the head office, and the branch does not need to be included in the expenses, so there is no problem of pre-tax deduction.

Legal basis: Provisional Regulations on Value-added Tax in People's Republic of China (PRC) Article 1 Units and individuals selling goods or processing, repairing and repairing services (hereinafter referred to as services), services, intangible assets, real estate and imported goods in People's Republic of China (PRC) are taxpayers of value-added tax and shall pay value-added tax in accordance with these regulations.