The eligible advertising expenses and business promotion expenses incurred by the enterprise, which do not exceed 15% of the current year's sales revenue, are allowed to be deducted; The excess shall be allowed to be carried forward and deducted in future tax years. Sales (business) income includes main business income, other business income and deemed sales income.

1. Advertising expenses incurred in tobacco manufacturing industry shall not be deducted before tax.

2. Pre-tax deduction standard for advertising fees in cosmetics, pharmaceuticals and beverage manufacturing industry: pre-tax deduction limit for advertising fees and business promotion fees = operating income *30% Basis: Article 1 of the Notice on Pre-tax Deduction Policy for Advertising Fees and Business Promotion Fees (Cai Shui [2017] No.41) stipulates that: for manufacturing or selling cosmetics, pharmaceutical manufacturing and sales,

3. Pre-tax deduction standard for business promotion fees and advertising fees of general enterprises: pre-tax deduction limit for advertising fees and business promotion fees = operating income * 15%, based on:

1) Article 44 of the Regulations for the Implementation of the Enterprise Income Tax Law stipulates that eligible advertising expenses and business promotion expenses incurred by an enterprise shall be deducted if they do not exceed 15% of the sales (business) income of the current year, unless otherwise stipulated by the competent departments of finance and taxation of the State Council; The excess is allowed to be carried forward to the next tax year for deduction;

2) Article 1 of the Notice of State Taxation Administration of The People's Republic of China on Several Tax Treatment Issues in the Implementation of Enterprise Income Tax (Guo [2009] No.202) stipulates that sales (business) income shall include the deemed sales (business) income as stipulated in Article 25 of the implementation regulations when calculating the deduction limit of business entertainment expenses, advertising expenses and business promotion expenses.

4. Deduction standard for advertising expenses incurred during enterprise preparation: According to Article 5 of Announcement of State Taxation Administration of The People's Republic of China, People's Republic of China (PRC) on Several Tax Treatment Issues of Enterprise Income Tax (State Taxation Administration of The People's Republic of China Announcement No.2012 15), advertising expenses and business promotion expenses incurred during enterprise preparation can be included in enterprise preparation expenses according to the actual amount, and deducted before tax according to relevant regulations.