It is official: The European commission has decided to renew the Video Game Tax Credit System through to the end of 2017. This is good news and a good opportunity to discuss the support for this sector.
Aid dedicated to video games
Video Game Tax Credit System
Vigorously started at the end 2008, the video game tax credit is a fiscal system which allows eligible companies to save 20% on video game production costs (this must respond to certain criteria in order to comply with the CNC).
For several months, the European Commission questioned the continuation of this system. There was more fear than actual harm in the end (Quantic Dream threatened to delocalize if the tax credit system wasn’t renewed), so after the Commission considered the positive impact on video game creation in France, they decided to renew this support until December 2017.
For more information, visit the CNC website
The financial support for video games
Guided by the CNC, there are three specific types of support:
- Intellectual property aid, in the form of a grant.
- Pre-production of video games, provided in the form of reimbursements and grants.
- Collective operational expenses, for professional marketing events.
Government aid: an international competition
Tax incentives are very prominent in other countries.
Canada (and more specifically Quebec) has always had ideal tax incentives for video game productions, covering up to 37.5% of the costs. So, a number of foreign publishers have installed themselves there: Ubisoft, Eidos, Electronic Arts…added to that are massive direct subsidies which attract companies like Warner Bros (7.5 million Euros) and THQ (3.1 million Euros). Still, the 2012 federal budget, which was made public at the end of March, announced a cut in tax incentives and the loss of certain advantages for foreign companies. An update which will cause a lot of changes…
In November 2011, Australia proposed tax incentives with credits between 20 and 30%.
Last March, the United Kingdom announced its intention to create a video game tax credit system with reductions from 20 to 25% applicable starting in 2013.
For more information
[small_button]English version by Danielle Harrell, English teacher for ArtFx[/small_button]