The European Commission has concluded that UK plans to grant certain tax relief to producers of video games are in line with EU state aid rules.
The Commission has found in particular that the measure provides incentives to developers to produce games meeting certain cultural criteria, in line with EU objectives. The video games tax relief will provide an incentive to video game developers to produce games meeting certain cultural criteria. After the Commission opened an in-depth investigation, the UK removed the originally envisaged territorial spending obligations imposed on beneficiaries of the scheme. The UK demonstrated in particular that the proposed cultural test ensures that the aid supports only games that are of cultural value. Only around 25% of UK produced games would be eligible for aid. Without this support the number of new culturally British games is likely to decline considerably. The Commission therefore concluded that the measure promotes culture without unduly distorting competition in the Single Market. It is therefore in line with Article 107(3)(d) of the Treaty on the functioning of the European Union (TFEU).