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Q：
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What is the standard for deducting business entertainment expenses incurred by enterprises before enterprise income tax?
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A：
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Business entertainment expenses incurred by an enterprise in connection with production and business activities shall be deducted at 60% of the amount incurred but shall not exceed a maximum of 5‰ of the sales (business) income of the year.
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Q：
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What proportion of business entertainment expenses are allowed to be deducted when individual industrial and commercial households are taxed with individual income tax?
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A：
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Business entertainment expenses incurred by individual industrial and commercial households, sole proprietorship enterprises and partnership enterprises directly related to their production and business operations in each tax year shall be deducted at 60% of the amount incurred but shall not exceed a maximum of 5‰ of the sales (business) income of the year.
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Q：
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When calculating the deduction limit for business entertainment expenses, does the sales income of an enterprise include the amount deemed as sales income?
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A：
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When an enterprise calculates the deduction limit for business entertainment expenses, advertising expenses and business publicity expenses, its sales (business) income shall include the amount of sales (business) income as provided for in Article 25 of the Regulations on the Implementation of the Enterprise Income Tax Law of the People's Republic of China.
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Q：
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Since the sales income is zero during the preparation period, can the business entertainment expenses be deducted before tax in this case?
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A：
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During the preparation period of an enterprise, the business entertainment expenses incurred in connection with the preparation activities may be included in the enterprise preparation expenses at the rate of 60% of the actual amount incurred and deducted before tax in accordance with the relevant provisions.
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Q：
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Can the specific income of an equity investment enterprise be included in the pre-tax deduction basis for business entertainment expenses?
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A：
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For enterprise engaged in equity investment business (including group company headquarters, venture capital enterprise, etc.) the dividends, bonuses and equity transfer income distributed from the investee enterprises may be calculated according to the prescribed proportion of business entertainment deduction limit.
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FAQ
