Gaming industry tax breaks due soon, says Sweeney of Games Ireland

3 Jun 20141 Share

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Scene from GIG 2014.

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At last week’s Games Ireland Gathering 2014 (GIG), those involved in the gaming industry and the dozens of different gaming companies from Ireland and abroad discussed the future of what a tax break could do for the industry.

Hosted by Games Ireland, one of the largest bodies representing the Irish gaming industry, the event while focusing on the ins and outs of the technical side of the business, had a key focus on how to actually make it in an industry which is full of talented individuals and companies, but is limited in terms of funding and established financial models.

In the third talk of the evening entitled “Incentives, Investment and Regulation”, a number of faces who have worked within the industry, particularly those in the UK, spoke of the need for realism when it comes to gaming start-ups looking to gain funding for their early projects.

One of the major talking points was regarding Ireland potentially following other European countries and introducing a tax break for the indigenous gaming industry, something which those involved on a daily basis with the developing Irish market have been calling for, for a number of years.

One of these is Games Ireland’s own CEO, David Sweeney who when giving the opening statement of the third panel confirmed that discussions with the Government have reached an advanced stage that could see a tax break introduced quite soon, something which could potentially revolutionise how a rather self-reliant industry can match our larger European neighbours.

During the open panel, John O’Sullivan of ACT Venture Capital meanwhile spoke about Ireland’s need to create greater ties with Britain in establishing a common market where “three to four winners within the [Irish gaming] industry to be considered a great success.”

Following Britain’s example

Speaking to Silconrepublic after the event, Sweeney detailed how recent development with the UK gaming industry and the development of a tax break have encouraged our own Government to re-think its thoughts on what they had previously viewed with an eye of scepticism.

As part of their system, those involved within the British gaming industry can claim back 25pc of their qualifying production costs as part of the European Commission (EC)-approved ruling.

At the inaugural GIG in 2011, an Taoiseach Enda Kenny and members of the Government visited the event in the Shelbourne Hotel in Dublin and spoke about their decision to establish a task force undertaken by Forfás Ireland that would look at the industry and how they could facilitate it.

Over a period of two and a half years, the major issues regarded whether it would be subsumed into the existing tax break for the Irish film industry – Section 481 – while also looking at the potential of it being included in the other existing tax break for industries involved in research and development.

However, little seemed to happen as there was a general feeling in the Government that the British proposal would not pass the EC. Now that that has proven false and it would appear that things have gotten back on track.

When we started Games Ireland a few years ago,” said Sweeney, “we were conscious that in other countries such as Canada, US, France, Finland etc there were very strong games industries that had been grown and supported by the governments with the introduction of tax incentives in the same way that similar incentives have existed here for decades.”

He went on to say that since the UK’s introduction of the tax break, the Irish Government is once again looking to follow-suit and called Games Ireland and other representatives within the industry together to trash out the details of a proposal that will go directly to ministers.

It’s now just a matter of waiting until the next national budget towards the end of this year to see whether we will indeed see the introduction of a dedicated tax break: “We’ve been chasing this for a number of years now,” says Sweenet and we don’t want to miss our chance to take our place in the vanguard of the industry in Europe.

It’s a fairly healthy industry and as people said [at GIG 2014], there’s an awful-lot of talent out there and it could be bigger than it is which could lead to a lot of spin off jobs in script writing and animation as there’s a lot of different skills involved in making a game.”

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Colm Gorey is a journalist with Siliconrepublic.com

editorial@siliconrepublic.com