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Tax breaks still a sore spot for many devs, GDC Europe survey says

Domestic tax incentives for the video game industry remain a controversial topic among European developers responding to the GDC Europe 2014 State of the Industry survey.
In order to get a better understanding of the European sector of game development right before GDC Europe, the Game Developers Conference has surveyed over 400 European games industry professionals who have attended GDC shows, read Gamasutra, or plan to attend GDC Europe 2014 in August. The resulting GDC Europe State of the Industry report offers some interesting insight into which European country is perceived to be a premier development hub, as well as how European developers are adapting to emerging trends like crowdfunding and regional tax incentives for game development. Yesterday, we shared some extended results from the survey regarding platform interest in Europe that suggest developers are excited about PC, mobile, PlayStation 4 and VR development. Today we dig deeper into the data and share some anonymous feedback from survey respondents to try and get a better sense of how European developers feel about the contemporary state of tax incentives in Europe, as well as how they might like to see the system improved. Many European developers still aren't satisfied with their country's tax breaks Roughly 13 percent of survey respondents reported being satisfied with their country’s domestic game development tax incentives, up from 10 percent in last year’s survey. 34 percent of this year’s respondents reported they were unhappy with their country’s video game tax breaks, and 53 percent were neutral on the topic.
Developers feel tax incentives are best in the U.K., but Canada remains the ideal Nearly half (47 percent) of survey respondents feel that the UK currently offers the best tax breaks for game development. Finland, France, Germany and the Netherlands were tied for a distant second, with 9.5 percent of the vote apiece. (Not all of the countries voted for have comprehensive tax breaks, but some were considered more 'tax-friendly' than others by our respondents.)
Many members of the European development community seem to appreciate the UK’s recent decision to implement tax breaks for the game industry. “It's great the UK finally has tax breaks,” wrote one respondent. “Other countries would be wise to follow suit.” Still, a number of respondents continue to cite Canada’s tax incentive program as a model system that is drawing business and talent away from Europe, with many writing comments like “We should try to do [tax breaks] like Canada...now they are top notch,” and “We lose a lot of business to Canada.” Those who are neutral on the topic seem to be in favor of alternate funding systems, like financial grants or cultivating a stronger investment culture. “[We] should focus on small grants for new startups, and larger grants towards startups that have proven potential,” wrote one developer. “I don't believe in industry-specific tax breaks, but rather fostering an entrepreneurial climate,” wrote another. By and large, the European developers surveyed tended to look upon domestic tax breaks for the video game industry as a boon for big publishers and developers, while small-scale game makers are better-served by direct grants or subsidies. "Large companies round their money through Luxembourg, [which is] not possible for smaller devs," opined one respondent. "Tax breaks are good for big guys, government subsidies are better for smaller studios," wrote another. [Organized by UBM Tech Game Network, GDC Europe 2014 -- now in its sixth year in Cologne -- will run Monday through Wednesday, August 11-13 at the Congress-Centrum Ost in Cologne, Germany, co-located with Europe's biggest video game trade and public show gamescom.] Gamasutra and GDC are sibling organizations under parent UBM Tech.

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