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The video game industry does not benefit from tax measures to support the cultural sector

The sector had demanded the inclusion of the video game in the deduction for investments that already benefit film productions, audiovisual series and live performances of the performing and musical arts.

The Spanish video game development and production industry has received with disappointment the news that the Government has not taken Spanish video game production into account in the fiscal measures proposed by the sector to mitigate the impact of the COVID-19 crisis.

The Royal Decree-law approving measures to support the cultural sector approved today by the Council of Ministers, despite reforming article 36 of the Corporation Tax Law, has not included the video game industry in the deduction for investments in film productions, audiovisual series and live performances of the performing and musical arts.

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This is a necessary measure to promote the entry of national and international investors into video game projects developed in Spain and whose great effectiveness has been widely demonstrated in the audiovisual sector, including animation and visual effects; So much so that the Royal Decree-law published today increases the tax deduction percentage for these productions from 20% to 30%.

In addition, other neighboring countries, such as France, Italy and the United Kingdom, have implemented the tax incentive for years from which video game development companies established in these territories benefit, increasing their competitive advantage over Spain when it comes to attract investments, projects, companies and human capital.

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On the other hand, the sector values ​​positively the direct award of two subsidies for a total of 20 million euros to the Reciprocal Guarantee Society Audiovisual Fiances SGR, to expand its technical provision fund and subsidize the cost of the commission for opening the guarantees of loans to the cultural sector, so that it can open a line of access to financing for agents in the sector under the most favorable conditions. The strengthening of the guarantee mechanism had also been one of the requests of the video game sector.

The tax incentive has been claimed by the sector for many years and is one of the measures that always appears in the White Paper on Spanish Video Game Development, published by DEV. Its approval at this difficult time would allow the video game development industry to mitigate the impact of the COVID-19 crisis, which, according to an industry survey, could cause a direct short-term loss of 90 million euros of turnover and a slowdown important in the annual growth of employment, equivalent to 500 jobs that would cease to be generated in 2020. Furthermore, if the health crisis lasted for more than 3 months, there is a risk of business continuity for 46% of the industry, that is, 240 companies. In this case, the direct loss of one third of the sector’s turnover and employment is estimated, that is, up to 270 million euros and 2,300 jobs.

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DEV regrets the lack of sensitivity towards the sector and claims the importance of supporting the Spanish video game development industry as it can represent an important engine of economic development and investment attraction for Spain in the recovery phase after containment measures for the COVID-19 crisis. It is an industry whose production processes and work methodologies make use of the most advanced technologies and 85% of companies already made use of telework before the COVID-19 crisis. Thanks to the tax incentive, it would be possible to launch important projects aimed at international markets, where it has been seen how video game consumption has increased significantly in recent months.

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: Press release