The European Commission has approved plans to offer tax incentives for video games production in France, following an investigation into whether the proposed tax breaks were illegal under EU rules, with the decision also being welcomed across Europe.
The French proposal
offers companies a tax credit worth up to 20 percent of the cost of producing a video game, providing that it is an adaptation of an existing work of European origin or that it passed a government test of quality, originality and contribution to the expression of “European cultural diversity and creativity”.
Since the tax breaks would only apply to France, EU competition laws may have prevented the proposals from going ahead. However, British-based group TIGA (The Independent Games Developers Association) has welcomed the EU ruling, pointing out more than half of all games made in Europe this year would have qualified.
TIGA itself submitted documents and research to the European Commission on state aids elsewhere in the world, and argued in favor of the French proposals in the face of “market distorting state aids being applied by Canada and other territories in the world”.
Campaigning against the tax credits was the ISFE (Interactive Software Federation of Europe), with Tiga arguing that the federation’s position was “untenable and inconsistent” since ISFE members were happy to receive state aid from countries outside the EU.
“Tiga notes that the UK government did not rule out applying the same support systems to the UK at the recent public debates with Ministers, and invites UK based publishers to support us in leveling the playing field for UK development groups in the face of loosing work and staff to Canada and other territories due to state aids”, said Fred Hasson, CEO of Tiga and chairman of EGDF (European Games Developers Forum).