game presents draft proposal for tax-based games funding in Germany
The German Games Industry Association has presented its concept for the introduction of tax incentives for games in Germany. In order to leverage the enormous economic, technological and cultural potential of computer and video games in Germany, a reliable and internationally comparable funding program for games is the decisive basis for success. However, the current fund-based games funding does not provide the necessary fair framework conditions due to the unreliable availability of funds. The association is therefore calling for a future funding model that adapts the current federal funding fund and supplements it with additional tax-based funding, which has long been the standard for success in other top locations. This should strengthen the competitiveness of Germany as a games location and create reliable and permanently available funding for games companies.
Boosting the relocation of companies from abroad
In order to create a level playing field in international comparison, the concept calls for the introduction of tax-based games promotion by means of tax credits of 30 percent or 35 percent for small and medium-sized enterprises. This would provide a strong boost to investment, tax revenue and value creation. This is shown for the first time in an analysis carried out by the research and consulting company Goldmedia on behalf of game. According to the study, every euro of games funding would trigger 4.80 euros of additional investment, 3.40 euros of additional tax revenue and social security contributions and generate 8.70 euros of gross value added in Germany. According to the experts, even higher values can be assumed if tax incentives are implemented on a permanent basis, as production capacities are expanded, companies from abroad are encouraged to relocate and larger games are developed in Germany for the global games market.
Why additional tax incentives for games in Germany?
With a total turnover of around 9.4 billion euros, the German games market is number 1 in Europe. 6 out of 10 Germans play computer and video games. However, as a production location for games, Germany still lags behind successful countries such as France, Canada and the UK. For many years, these and other top locations have relied on tax incentives for games development. This currently results in cost disadvantages of around 30 percent for games companies in Germany.