The European Commission, the executive branch of the European Union, has announced it is investigating the tax breaks for UK game developers proposed by the British government.
Specifically the Commission is looking to investigate whether the tax breaks will actually provide any boost to the British game industry upon introduction. Also being considered is whether the tax break, offered for games which meet certain British cultural criteria, is discriminatory and if the tax break could lead to subsidy race between the EU's 28 member states.
Finally, the Commission intends to determine whether the tax break distorts competition in the game marketplace due to the subsidy's cultural focus.
In a press release British games industry representative body, Ukie, commented “We are extremely disappointed that the European Commission has decided to open an in-depth investigation into production tax credits for the UK games industry. We believe this support is crucial in opening up the opportunity for developers to make culturally British games, but also as a vital incentive for development studios and large multinationals to base their development in the UK and nurture the talent here.
"We are still confident of having the scheme introduced and are fully committed to having it in place as soon as possible,” added the organisation's CEO, Dr. Jo Twist.
Andy Payne, the Chairman of Mastertronic and CEO of AppyNation said of the Commission's investigation “Running a games developer in the UK, this news is incredibly disappointing to me. Tax breaks will be a vital component in allowing the UK games industry to compete on a level playing field and helping it to once again grow to its full potential. We must all work together to make sure that this situation is resolved as quickly as possible for the sake of the UK games development sector.”
