Game on with new tax rebate for developers

Austrade

Good news for games developers: the Australian Government is introducing a 30% tax offset for local and international businesses that develop digital games in Australia.

The Digital Games Tax Offset is Australia’s first-ever federal tax incentive for video game development, and one of the most significant to be implemented anywhere in the world.

The tax offset provides another compelling reason for international developers to set up a games studio in Australia.

Australia’s A$3.6 billion digital games industry has close to 400 producers ranging from individual developers to large development studios. Australian developers are behind blockbuster titles such as Fruit Ninja, Crossy Road and Untitled Goose Game. Mighty Games, one of Australia’s leading games studios, recently listed on the Australian Securities Exchange.

Australia is also home to international studios such as Gameloft, Wargaming and Firemonkeys. Sledgehammer Games, one of the developers behind the Call of Duty franchise, grew its Australian workforce from six people to over 80 in just under a year – a feat it says was only possible because of the large number of creative and technical talent here.

The Digital Games Tax Offset will be available from 1 July 2022.

In addition to the Digital Games Tax Offset, the Australian Government will allow taxpayers to self-assess the effective life of depreciating intangible assets, including patents, registered designs, copyrights and in-house software.

The Government is also planning to review tax incentives designed to attract foreign investment and encourage venture capitalists to invest in early-stage Australian companies. The review will ensure current arrangements are fit-for-purpose and support genuine early-stage Australian startups.

Growing Australia’s digital future

The Digital Games Tax Offset is part of the Australian Government’s A$1.2 billion commitment to grow the nation’s digital future, guided by its Digital Economy Strategy.

The Digital Economy Strategy outlines the policies and actions the Government is taking to grow Australia’s future as a modern and leading digital economy by 2030.

The Strategy targets investment in emerging technologies, building digital skills, encouraging business investment and enhancing Government service delivery.

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