Games development companies will be able to take advantage of new tax credit for digital games after the Government officially signed regulations to give effect to the legislation.
Minister for Finance Paschal Donohoe, and Minister for Tourism, Culture, Arts, Gaeltacht, Sports and Media Catherine Martin, officially launched the new tax credit at an event in the Guinness Enterprise Centre hosted by games company Black Shamrock on Tuesday.
The move follows the approval by the European Commission of the €20 million scheme.
A hybrid of the existing research and development tax credit and film tax credit schemes, the incentive is designed to attract more games companies to Ireland and to nurture growth in the lucrative industry.
Aimed at encouraging projects that contribute to a varied cultural landscape, the scheme will be open to digital games development companies, with up to €8 million in tax credits per beneficiary, who must be liable for taxation in Ireland.
“Ireland is already a world leader in other areas of the audiovisual sector, including film, television and animation production; I believe that this credit will be instrumental in replicating such successes in the digital gaming sector,” Mr Donohoe said. “The introduction of this credit will ensure that Ireland is competitive in an industry that is estimated to be worth up to €260 billion.”
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Under the scheme, which will run until December 31st, 2025, the maximum amount of the tax credit will be equal to 32 per cent of eligible costs, expenditure must be incurred on the development of a digital game spent in the European Economic Area, and 80 per cent of total expenditure incurred on its development or €25 million, whichever is lowest.
“The Digital Games Tax Credit will lead to support for the development of indigenous games companies along with increased investment from overseas games companies looking to locate in Ireland,” Ms Martin said, adding that the scheme would help to create jobs in the creative and digital arts here.
The regulations will be signed by the chairman of Revenue, which will allow digital games development companies to apply for an interim certificate for a qualifying digital game, with applications for remuneration expected to begin from January 1st, 2023.
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The tax incentive was introduced in the Finance Act 2021 but required review and approval by the European Commission to ensure it did not fall foul of state aid laws. However, France and Germany, along with the UK before Brexit, had already implemented similar tax incentives.
Craig Stephens, representative of Irish video games industry association Imirt, said the new tax credit represented a “huge moment” for the sector. “This globally significant 32 per cent credit will support our existing games development talent, plus attract major investment from overseas,” he said.
