EC approves French tax credit for games

After a year of deliberation and investigation the European Commission has given the nod to France’s proposal for a production tax credit on video games, Develop understands – with an official announcement due later today.

Proposed in late 2006, the tax credit would cover 20 per cent of a game’s production costs, up to a maximum of €3 million ($4.39m/£2.15m), provided the title produced satisfied ‘a cultural dimension’. A bill backing the grants was passed by French Parliament in February, but since then has been pending EC approval, as commercial state aids are usually against EU rules.

It is not yet known how much of the above criteria has been approved by the Commission, although some changes are expected in the official announcement due today.

EU Competition laws against state aid have been a key reason touted by the likes of the UK’s trade association ELSPA and current government as to why the country cannot have such tax credits.

However, the EC’s decision to allow the French bill now paves the way for other countries in Europe to follow suit – meaning all eyes in the UK games industry are on the current Labour government which in October said it would implement its own tax credit if France’s made it past Brussels.