EU approves extension of tax credit for video game sector

The European Commission has given its approval for an extended tax credit aimed at boosting Ireland's digital gaming sector. The Digital Game Tax Credit, first introduced in November 2022, will now cover post-release content, a change welcomed by Finance Minister Simon Harris.

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Modern games don’t stop evolving on launch day, and it’s important our tax system keeps pace with the way the industry works today.

"Modern games don’t stop evolving on launch day, and it’s important our tax system keeps pace with the way the industry works today," Harris stated. He added that extending the credit to eligible post-release development supports studios throughout a game's life, not just its initial launch.

The initial uptake of the tax credit was reportedly slow, with game studios citing limiting structural aspects. The expansion aims to unlock the credit's full potential. The global video game industry's value is significant, surpassing that of the music and film sectors combined, with projections expecting it to reach over $385 billion in the coming years. Ireland's digital gaming sector alone is estimated to be worth approximately €250 million.

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Extending the credit to eligible post-release development means we are supporting studios through the life of a game, not just until its initial release.

Minister for Culture, Communications and Sport, Patrick O’Donovan, highlighted that the extension acknowledges the substantial creative work involved in game development beyond initial release. He described the approval as a "significant indicator of this government’s support for the digital games industry in Ireland."

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This is a significant indicator of this government’s support for the digital games industry in Ireland.