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China: Deductions for advertising and promotional expenses extended until December 31, 2027

Allows certain enterprises to deduct up to 30% of their turnover for such expenses

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jannuary 29, 2026

The Ministry of Finance and State Taxation Administration in December 2025 announced the extension of rules on deductions for advertising and promotional expenses for certain industries until December 31, 2027.

Previously, these rules were valid for 2021-2025, allowing enterprises in cosmetics, pharmacy, and non-alcoholic beverage manufacturing to deduct up to 30% of their turnover for such expenses, with any excess carried forward.

Enterprises in cost contribution arrangements can allocate deductions within the 30% limit. The tobacco industry remains excluded from these deductions. The extension is effective from January 1, 2026.


For more information, contact a KPMG tax professional in China:

Fiona Yu | fiona.yu@kpmg.com

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