News

Government’s 30% digital games tax offset a game changer for industry

The Morrison Government today, 6 May 2021, has announced a 30% tax offset for video game development.

The announcement comes as part of this year’s Federal Budget, aiming to invest in Australia’s digital economy.

The 30% refundable tax offset will be eligible for businesses that spend a minimum of $500,000 on qualifying Australian games expenditure. The Government will consult with the industry mid-2021 to define the criteria of expenditure.

The Interactive Games & Entertainment Association (IGEA) has responded to the proposed changes, welcoming Australia’s first federal tax incentive for video game development.

IGEA’s CEO, Ron Curry, has responded with enthusiasm to the news

The offset will be available from 1 July 2022 to Australian resident companies or foreign resident companies with a permanent establishment in Australia.

The game development industry is estimated to be worth globally $250 billion, and the Government is proposing these changes with the aim to encourage Australian businesses’ participation in the market.

Prime Minister Scott Minister said of the wider digital economy proposals: “We must keep our foot on the digital accelerator to secure our economic recovery from COVID‑19.”

Minister for the Digital Economy, Senator Jane Hume, added: “This is a really exciting announcement, which will drive investment and uptake of emerging technologies, unlock the value of data, build skills for a modern economy, and enhance Government service delivery.”

Ron Curry, CEO at IGEA, said: “This is a very welcomed day for Australian-made video games… video games have an important place alongside TV and film in Australian screen production and storytelling, but also their unparalleled potential for supercharging Australia’s exports, attracting vast inward investment, and up-skilling a whole new generation of Australian digital workers.”

Roger Clarke, chair of IGEA and managing director of Koch Media, commented: “It is clear from today’s decision that the Morrison Government has noticed how innovative and successful Australia’s game developers are, as evidenced by standout titles like Big Ant Studio’s AO Tennis 2 and SMG Studio’s Moving Out, to the amazing local independent studios like Mighty Kingdom and Hipster Whale who are exporting their games and services around the world, as well as the investment being poured into the Australian economy by international studios such as Sledgehammer Games, Gameloft, Wargaming, and Firemonkeys.”

Screen Producers Australia (SPA) also welcomed the announcement.

“Games development is a vibrant and critical part of our overall creative and knowledge economies, making a significant contribution to jobs and investment, and the Government’s recognition of this is timely,” said Matthew Deaner, CEO.

Further changes include amendments to the income tax law to allow taxpayers to self-assess the effective life of certain intangible assets. Currently, statute prescribes what the effective life is.

The amendment applies to patents, registered designs, copyrights, and in-house software for tax purposes.

The government also plans to review Australia’s venture capital tax concession programs to ensure they are fit for purpose.

ADVERTISEMENT

Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.

 

SUBSCRIBE

Sign up to our free daily update to get the latest in media and marketing.