The video games industry in the United Kingdom should have had tax breaks by now but the European Commission's questions on certain parts of the UK's proposals (mainly having to do with UK cultural tests) have stalled efforts so far. This week UK trade body TIGA urged the EU Commission to make a decision, reports Gamasutra.
In the same month that the proposed tax breaks were meant to kick in, the EU Commission launched an investigation because it does not believe that aid is necessary to stimulate the production of video games in the UK. The industry and the UK government disagree. TIGA CEO Richard Wilson said in response to the EU Commission that video games are cultural products and are therefore entitled to the same tax breaks that film already receive.
"Many games made in the UK are made with an international or Americanised theme, with culturally British elements eliminated," he said. "Games tax relief will enable more studios to self-publish and keep a British feel in their games, [and] will reduce the cost of games development in the UK and so could incentivise global publishers to take more of a risk on developing games with a British character."
Wilson also noted that what the UK proposed earlier in the year is in line with what other countries offer for tax breaks to the video games industry. For example, the UK video games development sector shrank by 7 percent between 2008 and 2012, while the Canadian games industry (which offers a bunch of tax breaks for the sector and has managed to lure away many UK companies) grew by 33 percent between 2008 and 2011.
Wilson also challenged the idea put forth by the EU Commission that game tax relief for the UK will somehow distort the EU's internal market, arguing that it is "primarily an outward facing measure addressing competitors beyond the borders of the EU rather than between other EU Member states."
Finally Wilson noted that the scope of the tax relief does not cover such things as gambling and advertising games, and that marketing and speculative costs are not included in the relief.