Report: French game development tax breaks may be prohibited

Game development tax incentives that were set up in France four years ago expired last month, and may not be reintroduced due to issues among French officials, according to media reports. The European Commission approved plans to offer tax incentives for video games production in France at the end of 2007, with the decision also being welcomed across Europe. However, this tax relief expired in January of this year, meaning that French studios are no longer able to benefit from the twenty percent refund on production costs. Business website Develop is now reporting that the reintroduction of the tax breaks, due to be approved by Wouter Pieke, the European Commission Directorate General for Competition, is not certain, as discussions have not pushed forward as hoped. Officials are discussing whether these tax benefits are distorting the market by giving an unfair advantage over other EU countries. If this tax exemption measure is not reinstated, developers in France will not longer be able to receive tax breaks. In a letter written to Pieke, Heavy Rain developer Quantic Dream's co-CEO Guillaume de Fondaumiere reportedly said, "the abandonment of this flagship measure, which brings hope to a large number of European studios and which has demonstrated its effectiveness in France, would be an historic mistake." Quantic Dream is based in Paris, France, and benefits from these tax breaks. "We would like to point out that this French measure has not caused any distortion in competition within the EU," he continued. He also noted that Ubisoft has relocated part of its game production back to France since the tax benefits were put in place, "a step they clearly attributed to the video game tax credit," he suggested. de Fondaumiere admitted that if these tax breaks are not reintroduced, his company will be looking to utilize similar initiatives in Canada.