European Commission approves UK games tax breaks

The European Commission announced it's approved the UK's long-sought gaming tax breaks, paving the way for the government to start finally implementing relief for game makers in the country. Almost a year after raising doubts over the necessity of the relief, the EU executive body concluded its investigation and gave the measure the go-ahead.

"Out initial doubts have been dispelled," said Commission VP in charge of competition policy Joaquin Almunia. "The proposed aid for video games is indeed focusing on a small number of distinctive, culturally British games which have increasing difficulties to find private financing."

The news means the UK government can begin providing tax relief on games that pass the proposed culture test, which assesses the Britishness of a game and its development. It may sound bizarre but the test was a sticking point for the EU Commission which was satisfied that "only around 25 percent of UK-produced games would be eligible for aid."

UK gaming trade body UKIE says the breaks come into effect starting April 1, confirming that as originally proposed, developers of qualifying games can claim 25 percent relief on 80 percent of expenditure.

"This is a great boost for the UK games industry, and excellent news for jobs and growth," said UKIE's Ian Livingstone. "There is no doubting the cultural, social and economic importance of games, the fastest-growing entertainment industry in the world. The new production tax credit will help UK games development talent to create even more world class, culturally British content for global audiences to enjoy. This support will undoubtedly result in a greater contribution from the games industry to the UK's digital economy."
[Image: Sony Computer Entertainment]

This article was originally published on Joystiq.