Many countries in the European Union have long cut taxes on video games at the national strategic level.
The European Parliament has passed a resolution to support the gaming industry. This takes the strategic significance of the video game industry in the EU to a new level. Immediately after the resolution of the European Parliament was passed, many countries began to act. The German Federal Parliament has approved an increase in the state budget for the gaming industry to 70 million euros in the middle of this month. Recently, Ireland and France have successively applied new support policies for the game industry.
According to official news from the Ministry of Economy and Finance, France plans to extend the tax exemption program for the game industry until 2028. Ministers shared a national bill that would allow game development studios to have can get a tax credit of up to 32% of development costs.
Since 2008, to ensure France’s competitiveness in the gaming sector, France has implemented the Electronic Game Tax Credit (TCVG) program. The plan has been reviewed twice by the European Parliament, and the conditions and exemptions have been relaxed. Now, French video games that meet the “cultural, original, creative” standards can get a tax deduction of 30% of the total development costs, with an upper limit of 6 million euros.
Historically, more than 370 projects and more than 150 companies have benefited from the TVCG scheme. Since 2017, the TCVG program has brought in a total of 220 million euros in tax relief. In 2021, a total of 38 new game projects will receive tax relief through the TCVG program, for a total of €43 million in tax relief.
“In France, we are fortunate to have one of the richest video game ecosystems in the world. This dedicated tax credit adjustment will help us work on larger projects and keep us running efficiently. Tax reduction is one of the priorities of French Economy and Finance Minister Bruno Le Maire.
In it, the French government emphasized that technological innovation games will receive extra points, meaning that projects that apply emerging technologies such as blockchain, VR and Metaverse will be favored. In addition, if the project is inspired by European cultural heritage and embodies European cultural characteristics, it will receive high marks.
Ireland also cut taxes by 32% to help the gaming industry go international. While attending an event organized by a game company, Irish Minister of Finance Paschal Donohoe and Minister of Tourism and Culture Catherine Martin announced that they would officially implement a tax deduction policy for the gaming industry. . This policy was announced last November and endorsed by the European Commission. According to local media, the tax cut is the highest amount of money invested in the video game industry in Irish history.
Similar to the French TVCG Act, Ireland will provide qualifying game developers with a 32% tax deduction for development costs (up to €25 million in tax deductions), which means The project will receive a tax deduction of up to 8 million euros. The bill will open for applications on January 1, 2023, and is currently expected to remain in effect until December 31, 2025.
Finance Minister Paschal Donohoe said in his speech: “Ireland has achieved a number of achievements in gaming. I believe this tax cut policy will greatly promote the development of the video game industry and catch up to this leading position. This tax cut will ensure Ireland remains competitive in the high-value gaming industry.”