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What is a Video Game Development Tax Credit

The game development tax credit is a relief available for companies that are engaged in producing and developing video games. It can be applied for the compensation of certain expenses that took place during the creation of the product. The credit per digital game is 32% of the lowest of:

  • eligible expenditure;
  • 80% of total qualifying expenditure or
  • €25 million. 

This approach can reduce the amount of tax for the profit that should be paid by the company. This blog post takes a look at the requirements for video game tax credit and whether your company can qualify. 

Certification of Video Games to Apply for Tax Credit

To obtain the right for credit the digital game has to be developed for commercial release and comply with the guarantees foreseen by the Video Recordings Act, 1989. The game should not be developed for advertisement, promotion, or gambling. The game should be certified by the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media as well. 

Companies that would like to obtain the credit need to receive a special certificate. The authorised representatives of the minister of the department of Tourism, Culture, Arts, Gaeltacht, Sport and Media evaluate various aspects of the game development and the company’s operations. Companies that meet the following criteria have the highest likelihood of qualifying

  1. Is a resident of the European Economic Area (EEA) and conducts business in Ireland. The game must be designed, produced, and tested within these parameters.
  2. Employs the creative talent and resources that are residents of Ireland or EEA; 
  3. The game must pass a cultural test administered by the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media. This involves demonstrating contributions to Irish or European culture through aspects like the game’s setting, characters, language, subject matter, and use of Irish or EU-based creative talent and resources.
  4. The game plots involve promoting sustainability and minimization of climate change, music, the educational content of the games for kids, and topics related to equity.

Types of Certification for Video Games

There are two basic certifications for video games in the Irish Republic. Interim certification is applied when the game is under the development process and the final certificate is applicable when the product has been released to the market. 

To Sum Up

The game development tax credit is a great opportunity to get tax relief on the development of video games that contribute to Irish or European culture and engage local talent for development and promotion purposes. 

If you’re looking for assistance in setting up and running a company in Ireland for video game development purposes, contact Chern & Co. Our experts will help you establish a business in Ireland and ensure tax compliance.

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