Digital Games Tax Credit

The digital gaming tax credit must primarily be used to offset any liability for corporation tax that the company has for that particular accounting period. Where no corporation tax is due, or the credit is more than the CT liability itself, the company can claim the remainder in cash.

Companies have 12 months to claim the digital gaming tax credit if an interim certificate is issued. Remember, though, this means 12 months from the end of the accounting period during which the eligible costs were incurred.

An example:

Say a company’s year-end is 31st December 2022. Where this is the case, a claim relating to relevant costs incurred from the 1st of January 2022 to the 31st of December 2022 must be submitted by the 31st of December 2023.

Final claims can be made by companies that hold a final certificate. However, any amounts received under an interim certificate must be deducted, with the overall credit amounting to no more than €8,000,000.

Sometimes, a company won’t be able to claim the digital gaming tax credit, for example, if:

• The digital game being developed is for gambling, marketing or advertising.
• They haven’t received either an interim or final certificate.
• They hold an interim certificate, which has expired, or a final certificate hasn’t been issued.

Any company resident in Ireland can claim the digital gaming tax credit. Alternatively, a claim can still be made if the company is based in the EEA and operates in Ireland via an agency or branch.

To be eligible, the game must integrate digital technology and be published on an electronic medium, for example, a games console. It must also be interactive (or at least incorporate three or more of the below):

• Sound.
• Text.
• Animated images.
• Still images.

The credit can also be claimed for money spent on the game's development, production, and testing.

The concept of a digital gaming tax credit was first announced in the 2021 Budget. It’s essentially all about encouraging projects that enhance the European digital audiovisual sector whilst bringing about a more varied cultural landscape.

This lucrative new tax relief offers companies developing digital games a tax credit of up to 32% per eligible game. It can be claimed annually or once the game’s development has been completed.