Channel 4 report says government may also follow France if its tax break bill passes EC
The Minister for Culture, Media and Sport has said that the UK may challenge the legal basis of Canada's generous tax credits in a bid to level to the paying field for the country's interactive entertainment talent.
Speaking to Channel 4 news, the minister Margaret Hodge said: "We're looking at what they [Canada] have done. We're not sure what they have done sticks by the WTO rules on competition and will have to think about challenging what they are doing if they are, in our lawyer's views, breaching those rules."
In Canada's Quebec region games companies such as Ubisoft and EA have negotiated to get up to 40 per cent of their studio staff salaries refunded via tax rebates. Eidos opened a studio there early this year also.
The Canadian high commission said it was confident it was abiding to WTO law and that it would discuss the matter with the UK Government. But the country's generous tax environment has frustrated many in the industry, especially those developers in the UK and other countries unable to compete on cost. In the UK the matter is compounded by the stronger Pound conversion rate.
Last week, industry execs were told by Hodge that tax breaks for UK studios were "unlikely", but that her team were looking into it, and provided conflicting comments about their viability delivered during the London Games Festival. She also said the UK industry was split over whether they wanted them introduced - so possible WTO legal action and an attempt to kibosh Canada's comfortable credits might be a compromise.
Advertisement
At the same time the French government has been trying to implement similar tax credits as well in order to compete with Canada and Quebec specifically - a bill passed by the country's parliament is currently pending EC judgement as it may conflict with EC State Aid rules.
If the move fails, it will almost certainly rule out any similar action, however a Government source has revealed that Department of Culture, Media and Sport is closely watching the France's proposed tax credits, telling Channel 4 that UK authority will move to copy it should the French act make it past the European Commission.
The article is misleading. This is not a Canadian federal government initiative. Only Quebec provides tax breaks for game companies which means only provincial taxes are credited. Not federal taxes. No other province in Canada provides this.
Well, in fact, you are partially misled Wolfgang. You're right about this not being a federal government initiative but British Columbia and Ontario also offer tax credits for digital and new media production. 20 or 30% depending on a few conditions.
Contrary to popular belief, the end of the year is one of the best times to look for, awesome descion
Nice one DCMS. Your solution to not providing tax breaks such as those provided by Canada, is to grass Canada up for encouraging investment.
You sound like a spoiled child taking his ball back because he is crap at football.
You should be thoroughly ashamed. You don't understand the industry and you never will. Why not just replace the words 'film industry' with 'games industry' and then go and look at the heafty benefits you've been thowing out to them for years.
You will notice that when you gave tax breaks, people with lots of money filmed here. When you stopped them they left.
WOULD YOU LIKE A F*****G DIAGRAM?
