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The UK’s video games tax relief could be abandoned after the European Commission (EC) opened an in-depth investigation into the proposed measure over doubts it is necessary
“There is no obvious market failure in this dynamic and growing sector and that such games are produced even without state aid,” said the commission about the planned 25% relief on a maximum of 80% of the production budget of a qualifying video game for expenditure on goods and services used or consumed in the UK
The UK’s video games tax relief could be abandoned after the European Commission (EC) opened an in-depth investigation into the proposed measure over doubts it is necessary
“There is no obvious market failure in this dynamic and growing sector and that such games are produced even without state aid,” said the commission about the planned 25% relief on a maximum of 80% of the production budget of a qualifying video game for expenditure on goods and services used or consumed in the UK
The EC's vice-president in charge of competition policy, Joaquín Almunia, added: “The market for developing video games is dynamic and commercially promising. It is not clear whether the taxpayer should be subsidising this activity. Such subsidies could even distort competition.”
The opening of an in-depth investigation does not prejudge its outcome but gives the UK and other parties the opportunity to comment.
