The business organization in an enterprise refers to the business organization that does not have the legal person status in the enterprise. The relationship between "subsidiary and parent company" you mentioned is understood as belonging to the controlling parent company and the affiliated enterprise controlled by the parent company. The trademark royalties paid by subsidiaries for using the trademarks of the parent company do not belong to the royalties that cannot be deducted as stipulated in Article 49 of the Regulations.
(II) The Enterprise Income Tax Law of People's Republic of China (PRC) (Order No.63 of the President of the People's Republic of China, 2007) Article 8 The reasonable income-related expenses actually incurred by an enterprise, including costs, expenses, taxes, losses and other expenses, are allowed to be deducted when calculating the taxable income.
Article 41 Where the business dealings between an enterprise and its related parties do not conform to the principle of independent transactions, and the taxable income or income of the enterprise or its related parties is reduced, the tax authorities have the right to make adjustments in a reasonable way.
Article 123 of the Regulations for the Implementation of the Enterprise Income Tax Law of People's Republic of China (PRC) (the State Council Order No.512, 2007) If the business dealings between an enterprise and its related parties do not conform to the principle of independent transactions, or the enterprise implements other arrangements with no reasonable business purpose, the tax authorities have the right to make tax adjustments within 10 years from the tax year in which the business occurred.
Accordingly, the trademark royalties paid by subsidiaries for using the parent company's trademarks can be deducted before tax as long as they meet the legal provisions between the above-mentioned affiliated enterprises.