Parata Hekia: Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill — In CommitteeText is incorporated into the Bound VolumeParata Hekia: Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill — In Committee[Sitting date: 01 December 2015. Volume:710;Page:8456. Text is incorporated into the Bound Volume.]Hon HEKIA PARATA (Minister of Education): I would like to take the opportunity to respond to or answer some of the questions that have been raised by the member Clayton Cosgrove as to why the saving provision in the Supplementary Order Paper 129 does not apply after 26 February 2015. The proposed application date provides greater certainty for taxpayers. The amendment is intended to create certainty in an area where there has been much historical uncertainty.Grant Robertson: We accepted that.Hon HEKIA PARATA: I am just being very clear. On 26 February 2015 the date of introduction of the Taxation (Annual Rates for 2015-16 Research and Development and Remedial Matters) Bill the position for bodies corporate was clearer. The proposed legislation clarified that they could register for GST and claim deductions themselves. A later application date would mean two potentially conflicting sets of rules would apply at the same time. Overlapping rules may involve additional complexity in the legislation and create confusion and additional uncertainty for bodies corporate and their unit holders. A later application date may result in compliance costs for bodies corporate.Previously a look-through approach similar to the savings provision was proposed and consulted on. The approach was not supported by submitters because of the compliance costs associated with applying the approach. If the saving provision was to apply from a later date bodies corporate may incur additional compliance costs if unit owners wish to change their tax positions and claim deductions on a look-through basis. Submissions supported the proposed approach and the application date. Submitters to the Finance and Expenditure Committee supported the approach taken in the bill and the application of this approach from the date of introduction—26 February 2015. Submitters did not raise concerns that the amendment did not give unregistered bodies corporate enough time to determine whether or not to register. And finally there may be fiscal risks if the saving provision applied after 26 February 2015.The amendment contained in the bill includes special rules applying from the date of introduction to ensure that GST is neutral for bodies corporate that decide to register. Applying the savings provision to goods and services acquired after 26 February undermines these rules and may give certain unit owners a tax advantage. This could be perceived as unfair by unit owners unable to gain the same tax advantage. The financial costs of the proposal were budgeted based on this neutrality so allowing additional deductions to be claimed post - 26 February could create a fiscal risk to the Government particularly if the application date enabled unit holders to structure their affairs to best take advantage of the provision. I trust that this assists the member.