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EU Commission to launch investigation into UK games tax relief, “doubts” it’s necessary

Tuesday, 16th April 2013 15:06 GMT By Stephany Nunneley

The European Commission believes there is “no obvious market failure” in the UK games sector to provide tax relief to developers, and has opened an in-depth investigation into the proposed scheme backed by the industry and trade groups.

The UK has intended to introduce 25% tax relief on a maximum of 80% of a firm’s production budget should the video game qualify.

However, the commission wonders whether such aid is necessary to stimulate video game production, and feel it would not “fuel a subsidy race between Member States.”

“The market for developing video games is dynamic and commercially promising,” said Joaquin Almunia, Commission VP. “It is not clear whether the taxpayer should be subsidising this activity.

“Such subsidies could even distort competition.”

It was also questioned whether “limiting expenditure for the tax relief to goods or services ‘used or consumed’ in the UK would not be discriminatory,” reports GI International.

The commission is also concerned whether the cultural test developers would have to undertake would ensure the relief would support only games “with cultural content without leading to undue distortions of competition.”

Trade bodies UKIE and TIGA, both huge supporters of the scheme, expressed disappointment in yet another delay to relief, and plan to continue pushing the matter.

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5 Comments

  1. Hirmetrium

    Wow, and yet films seem to be ok?

    I like the EU commission sometimes… but they seem to split hairs over really silly things.

    Anybody willing to explain why films are treated so differently?

    #1 2 years ago
  2. Gheritt White

    Great. This is just flipping GREAT. :/

    How can they be so blind as to what is going on in Canada right now?

    #2 2 years ago
  3. Demigod

    @1 So they can make french/german italian etc language films and still make a profit? Cant think of another reason tbh

    #3 2 years ago
  4. DSB

    And yet the EU wonders why no one wants it. That whole “union” makes American politicians look good.

    #4 2 years ago
  5. Beta

    God I would love for us to leave the EU.

    Lording it over us from Brussels.

    #5 2 years ago

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