The European Commission, the Executive Branch of the European Union, agreed to extend France’s video game tax credit until the year 2017 on Wednesday.
The original tax credit was granted in 2007 for a trial period of three years until December 31, 2011. The European Games Developer Federation (EGDF) mobilized to convince the members of the European Parliament to extend this credit for a longer period of time, and the European Commission decided to extend the tax credit for the French video game industry an additional six years to December 31, 2017.
Guillaume de FONDAUMIERE, Chairman of the European Games Developer Federation (EGDF), had this to say about the development:
“I welcome this important resolution for our industry. It will allow France to pursue a scheme that has proven very successful, in particular to relocate creative forces that had left the country. But more importantly for Europe as a whole… I hope that this extended window will now encourage other countries such as the United Kingdom to quickly put in place similar measures.Through this decision, the Commission has also confirmed the legitimacy of games as a form of cultural expression, puttingvideo [sic] games on equal footing with films or books.”
This comes hot on the heels of the United Kingdom’s measure to introduce tax breaks for that country’s videogame industry as a result of British EGDF member, TIGA, convincing the UK government of the soundness of this plan.
Dr. Richard Wilson, CEO of TIGA, also commented on the French tax credit:
“TIGA successfully convinced the UK Government to introduce a tax break for games production in the March 2012 Budget. Today’s announcement by the European Commission gives the UK the green light to introduce this vital tax measure as soon as possible. This is a triumph for the French, the UK and the wider European games development sectors achieved by SNJV, TIGA and the EDGF trade associations, and I applaud the Commission’s decision.”
Analysis: This is more good news not just for the game’s industry, but for gamers as well. More tax credits means less developers folding and more games being made. In reality, these tax breaks make a lot of sense: When the UK didn’t have any tax considerations for video game developers, the once mighty UK video game industry became a shadow of its former self. Meanwhile, Canada now has one of the most vibrant video game development scenes around thanks to tax breaks in Quebec and Ontario, and many former UK developers have moved there or just across the channel to France when it enacted the tax break in 2007.
In a world where high tech companies can stimulate economies, giving tax breaks to video game manufacturers is smart business. I hope to see more countries enacting this sort of legislation now that the European Commission seems convinced that this is a good idea.