The Irish Government has given the green light to a digital gaming tax credit for the Republic.
The tax credit, which is pending state aid approval from Europe, will provide 32 per cent corporation tax relief on design, production and testing expenditure of €100,000-€25 million per project.
The move is set to make the industry attractive to students, boost the reputation of Irish companies, and allow for new hires.
Considering this change to the Irish gaming market, the British government must take steps to maintain the UK’s competitive edge.
Video Games Tax Relief is the most important factor in determining the favourability of the UK’s tax environment as far as the video games sector is concerned.
VGTR has been crucial in enabling the UK video games industry to compete on a more level playing field against the UK’s international competitors, particularly Canada, which benefit from generous forms of tax relief.
In light of Ireland’s incoming 32 per cent rate of relief, TIGA is calling for an increase in the rate of VGTR from 25 to 32 per cent.
A 32 per cent rate of VGTR would, in effect, yield a 28 per cent increase in economic benefit to UK games company claimants vs the base 25 per cent rate. TIGA has worked with Games Investor Consulting to model the impact of a 32 per cent VGTR rate on the growth of the industry.
The introduction of VGTR has transformed the sector, stimulating new studio growth, increasing the sector’s contribution to the economy and generating employment.
As more countries develop similar policies to support the video games industry, now is the perfect time for the UK Government to commit to increasing the rate of VGTR to stay competitive.