Once a year, you have to make an adjustment on your GST return to pay GST on the 50% non-deductible expenses you've previously claimed - these are supplies under the GST rules. You make this adjustment in the GST return that covers the earlier of:
- the date your income tax return is due to be filed, or
- the date you file your income tax return.
The GST adjustment is 3/23 of the non-deductible entertainment expenses, exclusive of GST (except non-taxable allowances). Include the adjustment on the GST adjustments calculation sheet (IR372) under "Entertainment expenses" and in the adjustments total in Box 9 of your GST return.
Note
You can't claim this GST adjustment amount as a deduction for income tax purposes.
For more information, and an example, see IRD Entertainment expenses (IR268) guide.