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A NEW TAX SYSTEM (GOODS AND SERVICES TAX) ACT 1999 - SECT 69.5

Non-deductible expenses do not give rise to creditable acquisitions or creditable importations

             (1)  An acquisition is not a * creditable acquisition to the extent that it is a * non-deductible expense.

             (2)  An importation is not a * creditable importation to the extent that it is a * non-deductible expense.

             (3)  An acquisition or importation is a non-deductible expense if it is not deductible under Division 8 of the * ITAA 1997 because of one of the following:

                     (a)  section 26-5 of the * ITAA 1997 (Penalties);

                     (b)  section 26-30 of the * ITAA 1997 (Relative's travel expenses);

                     (c)  section 26-40 of the * ITAA 1997 (Maintaining your family);

                     (d)  section 26-45 of the * ITAA 1997 (Recreational club expenses);

                     (e)  section 26-50 of the * ITAA 1997 (Expenses for a leisure facility);

                      (f)  Division 32 of the * ITAA 1997 (Entertainment expenses);

                     (g)  Division 34 of the * ITAA 1997 (Non-compulsory uniforms);

                     (h)  section 51AK of the * ITAA 1936 (Agreements for the provision of non-deductible non-cash business benefits).

          (3A)  An acquisition or importation is also a non-deductible expense to the extent that it is not deductible under Division 8 of the * ITAA 1997 because of one of the following:

                     (a)  section 51AEA of the * ITAA 1936 (Meal entertainment--election to use the 50/50 split method);

                     (b)  section 51AEB of the ITAA 1936 (Meal entertainment--election to use the 12 week register method);

                     (c)  section 51AEC of the ITAA 1936 (Entertainment facility--election to use the 50/50 split method).

             (4)  If the entity making the acquisition or importation is an * exempt entity, the acquisition or importation is a non-deductible expense if it would have been a non-deductible expense under subsection (3) or (3A) had the entity not been an exempt entity.

             (5)  This section has effect despite sections 11-5 and 15-5 (which are about what is a creditable acquisition and what is a creditable importation).



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