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France Strengthens Video Game Tax Break

by Ulrika Lomas,, Brussels

10 December 2013

French Culture Minister Aurélie Filippetti, Budget Minister Bernard Cazeneuve, and Innovation Minister Fleur Pellerin, have welcomed the National Assembly's adoption of plans to reform the country's video games tax credit (CIJV).

The Ministers welcomed in particular the National Assembly's decision to wave through two key amendments pertaining to the reform.

Marking a first step towards strengthening the CIJV tax credit, the Government decided to extend from 36 months currently to 72 months the period in which eligible expenses incurred for video game development can be taken into account for the tax shelter. Article 14 of the Government's year-end supplementary finance bill (PLFR 2013), currently being debated by lawmakers, abolishes the stipulation that development costs must exceed EUR10m (USD13.7m) in order to qualify for the extension. The measure is intended to take into consideration the increase in product development time, as a result of constantly evolving techniques, and to ensure that not only blockbuster games benefit in the future.

Furthermore, the National Assembly backed amendments to the PLFR 2013, including plans to lower the minimum budget requirement for the tax credit, from EUR150,000 currently to EUR100,000. Deputies also gave the green light to plans to enable violent video games (PEGI 18+), hitherto excluded from the scope of the tax break, to benefit from the CIJV tax credit in future.

Delighted by the outcome, the French Ministers emphasized that the reform will serve to stem the relocation of French companies in the video games industry to countries such as Canada and the US, where more favorable tax instruments are available. In five years, France has lost 50 percent of all jobs in this sector, they noted, maintaining that the reform will therefore ensure that jobs in France are maintained and created, and will even encourage businesses to return, thereby placing France once again at the forefront of the video games industry.

TAGS: tax | business | law | budget | corporation tax | Canada | France | tax breaks

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