The Supplementary Notice of State Taxation Administration of The People's Republic of China on Annual Tax Declaration of Enterprise Income Tax (Guo [2008]1081No.), annex I "Income Statement", and the annex stipulates that "total sales (business) income" is used to fill in the main business income and other business income confirmed by taxpayers according to the national unified accounting system.
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) also clearly 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. Therefore, the calculation base of the pre-tax deduction limit of business entertainment expenses should be based on the income stipulated in the tax law, which includes the income from main business, other business income and deemed sales income confirmed according to tax regulations, but does not include non-business income.