UK Needs Video Game Tax Break
July 10, 2013 Taxation in UK
HELSINKI – Providing video game makers with tax relief is a matter of cultural and economic necessity, which would benefit studios across all of Europe, according to a group representing over 600 game development studios.
In a statement issued on July 3rd the European Game Developers Foundation (EGDF) lent its backing to a proposal for a tax relief program aimed at helping businesses involved in the production and development of video games.
Earlier this year the UK government proposed a tax relief program granting a 25 percent tax break to businesses producing video games deemed to have creative or cultural significance.
Shortly following the initial announcement of the tax break by the UK government, the European Commission launched an investigation to determine whether such an assistance program was really necessary in the UK, and whether the relief would cause distortions on the video game production sector of Europe.
The EGDF stated that in the past, similar tax benefits have been offered in France and Canada, and the move did not lead to any negative effects on the market.
According to the Foundation, allowing the tax break is a matter of great importance for the whole of Europe, as the UK “…has historically been Europe’s stronghold when it comes to video games development” and the country is seeing “an alarming brain drain and entire studios closing down” with investments being shifted to the USA, where tax relief is already being offered for video game production.