By Gráinne Ní Aodha, PA
A new 32 per cent tax credit for video game companies is hoped to promote creativity in the industry and attract gaming studios to Ireland.
The relief will be provided through a refundable corporate tax credit available to companies for the qualifying cost of designing, producing and testing a video game.
The rate will be at 32 per cent of eligible expenditure up to a maximum of €25 million per project.
There will also be a minimum spend requirement of €100,000 per project.
The aim of the credit is to retain the main gaming brands in Ireland through more development activities, to support the scaling up of indigenous developers, and to lure international studios who have not already invested in Ireland.
The Department of Finance said that the global digital gaming market is estimated to exceed the global film and music industries combined.
A 2017 report commissioned by the Government estimated that in 2016, the video game industry generated €143 million in gross value added to the Irish economy.
Irish video games, however, account for just €1.2 million of this total.
Minister for Finance Paschal Donohoe said that the credit will ensure Ireland is competitive in an industry estimated to be worth up to €260 billion globally.
He added: “Ireland is already a world leader in other areas of the audio-visual sector including film, television and animation production, I believe that this credit will be instrumental in replicating such successes in the digital gaming sector.”
Minister for Tourism, Culture, Arts, Gaeltacht, Sports and Media, Catherine Martin said that the industry is increasingly employing more people.
“Today is an important day for the expanding Irish games industry and this scheme will help to create jobs in the creative and digital arts in Ireland,” she said.
Craig Stephens, of Imirt – the Irish video games industry association, said the tax credit represented “a huge moment” and said it would promote “a new era of development creativity”.
“This globally significant 32 per cent credit will support our existing games development talent, plus attract major investment from overseas.
“Ireland is ideally positioned to secure more of the rapidly expanding $300 billion worldwide industry.”
Mr Donohoe and Ms Martin attended a launch event hosted by the gaming company Black Shamrock in the Guinness Enterprise Centre and formally signed the regulations to give full effect to the legislation.
This follows approval of the credit by the European Commission in recent weeks.
The regulations will now be signed by the Revenue Commissioners thereby allowing digital games development companies to apply for an interim certificate for a qualifying digital game.
It is expected certificate holders will then be able to apply for remuneration under the credit from January 1st, 2023.