Q: According to the Notice of State Taxation Administration of The People's Republic of China, Ministry of Finance of People's Republic of China (PRC) on Handling Enterprise Income Tax of Special Financial Funds (Caishui [2009] No.87), can the expenses generated by the funds be deducted from the input tax? Article 10 of the Provisional Regulations on Value-added Tax stipulates that the input tax amount of the following items shall not be deducted from the output tax amount: (1) purchased goods or taxable services used for non-VAT taxable items, VAT-exempt items, collective welfare or personal consumption; (2) Abnormal losses of purchased goods and related taxable services; (3) Goods purchased or taxable services consumed by products in process and finished products with abnormal losses; (four) consumer goods for taxpayers' own use as prescribed by the competent departments of finance and taxation of the State Council; (five) the transportation costs of goods and the transportation costs of selling duty-free goods as stipulated in items (1) to (4) of this article. According to Annex 2 of the Notice of People's Republic of China (PRC) Ministry of Finance State Taxation Administration of The People's Republic of China on Incorporating Railway Transportation and Postal Industry into the Pilot Project of Changing Business Tax to VAT (Caishui [2065 438+03] 106), 5. The original general VAT taxpayer accepted the taxable services provided by the pilot taxpayer. The input tax amount of the following items shall not be deducted from the output tax amount: (1) Simple tax method taxable items, non-VAT taxable items, VAT exempt items, collective welfare or personal consumption, and the patented technology, non-patented technology, goodwill, trademark, copyright and tangible movable property lease involved only refer to the patented technology, non-patented technology and tangible movable property lease dedicated to the above items. (2) Accepted passenger services. (3) Transportation services related to purchased goods with abnormal losses. (4) According to the provisions of Article 28 of the Regulations for the Implementation of the Enterprise Income Tax Law, the expenses related to abnormal losses of purchased goods consumed by products in process and finished products, which are paid by using the non-taxable income stipulated in the Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Enterprise Income Tax Treatment of Special Financial Funds (Caishui [2009] No.87), shall not be deducted when calculating the taxable income; Depreciation and amortization of assets used for expenses shall not be deducted when calculating taxable income. However, for the expenditure formed by non-taxable income stipulated in Caishui [2009] No.87, if it is used to obtain legal VAT deduction vouchers, if it is not used to stipulate items that cannot be deducted from the input tax, then the input tax can be deducted.