Non-Deductible Input Tax 

If part or all of the input tax is non-deductible, you can post the tax amount to a separate expense account or distribute it to the G/L account and asset line items. You enter the tax percentage rates for the input tax portion and the non-deductible portion under a shared tax code. If the entire input tax is non-deductible, you must specify for the tax code that zero percent input tax is to be calculated. See also Example: Posting Non-Deductible Input Tax