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UK video game tax breaks are still up in the air

The UK is still waiting for video game tax breaks, despite the fact that they should have been in place by now -- and UK trade body TIGA today urged the EU Commission to put its foot down on the decision.
The UK is still waiting for video game tax breaks, despite the fact that they should have been in place by now -- and UK trade body TIGA today urged the EU Commission to put its foot down on the decision. In the month that the proposed tax breaks were meant to come into effect, the EU Commission launched an investigation into the case for such a relief program, stating that it does not believe that aid is necessary to stimulate the production of video games in the UK. In a direct response to the EU Commission today, TIGA CEO Richard Wilson argued that video games are cultural products similar to other audio-visual creations, such as film, that already receive tax breaks. And Wilson noted that video game tax breaks would directly result in culturally British games being developed. "Many games made in the UK are made with an international or Americanised theme, with culturally British elements eliminated," he said. "Games tax relief will enable more studios to self-publish and keep a British feel in their games, [and] will reduce the cost of games development in the UK and so could incentivise global publishers to take more of a risk on developing games with a British character." He also noted parallels with those countries that have game tax breaks. While the UK development sector shrunk by 7 percent between 2008 and 2012, the Canadian games industry grew by 33 percent between 2008 and 2011. Elsewhere, Wilson challenged the notion that game tax relief for the UK will distort the EU's internal market, arguing that it is "primarily an outward facing measure addressing competitors beyond the borders of the EU rather than between other EU Member states." And he noted that the scope of the relief is curtailed -- expenditures for gambling games and advertising games are not eligible, while marketing and speculative costs are not included in the relief. Whether this call to arms from TIGA will cause a change of pace in the EU Commission's investigation remains to be seen.

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