481A Relief for investment in digital games

Summary

Digital games relief is an incentive to digital games developers to produce digital games that contribute to the promotion and expression of Irish and European culture.

The relief is a corporation tax credit for digital games development companies. The rate of the credit is 32% of the lowest of eligible expenditure, 80% of qualifying expenditure, or €25 million per game. The credit is available on expenditure incurred in the design, production and testing stages of the development of qualifying digital games, provided certain conditions are met.

The qualifying expenditure in respect of a completed game must not be less than €100,000.

A cultural test also applies. In order to claim the credit, a company must first apply for cultural certification as a qualifying digital game by the Minister for Culture, Communications and Sport.

An interim cultural certificate may be applied for at any point before or during the development of the digital game and will allow relief to be claimed on an interim basis. A final cultural certificate is applied for on completion of the digital game and will allow the company claim either the full amount of the credit or, if the company has previously claimed relief on an interim basis, the balance of the credit due.

Details

Definitions

(1) “date of completion” means when the qualifying digital game is made available to the public or, if commissioned, when the game has been provided to the commissioning entity.

“digital game” means a game which integrates digital technology and incorporates at least three of the following classes of information, in digital form: text, sound, still images and animated images. The game must be capable of being published on an electronic medium and controlled by software enabling the person playing the game to interact fully with the dynamics of the game, including by providing feedback to the person, enabling control over elements of the game by the person and allowing the person to adapt elements of the game. “digital games corporation tax credit” in relation to a qualifying digital game, means an amount equal to 32 per cent of the lowest of—

1. the eligible expenditure amount,
2. 80 per cent of the qualifying expenditure, and
3. €25,000,000.

“digital games development company” means a company that—

1. is resident in the State, or is resident in an EEA State,
2. carries on a trade of developing digital games on a commercial basis with a view to the realisation of profit, and that are wholly or principally to be made available to the public, and
3. is not part of an undertaking which would be regarded as an undertaking in difficulty.

“EEA Agreement” means the Agreement on the European Agreement Area as adjusted by subsequent amendments;

“eligible digital game” means a digital game which –

1. is developed on a commercial basis with a view to the realisation of profit,
2. is wholly or mainly to be made available to the public,
3. is an exempted work within the meaning of the Video Recordings Act 1989, and
4. is not a digital game produced solely or mainly for promotional or gambling purposes.

“EEA State” means any state other than Ireland that is a contracting member of the EEA;

“eligible expenditure” means the portion of the qualifying expenditure that is expended on the development of the digital game in the State or an EEA State as set out in regulations.

“final certificate” means a certificate issued by the Minister under subsection (9).

“interim certificate” means a certificate issued by the Minister under subsection (4).

“interim digital game” means a digital game which is proposed to be developed or is in the process of development in respect of which an interim certificate has been issued by the Minister, and no final certificate has been issued.

“interim digital games corporation tax credit”, in relation to an interim digital game, means an amount of expenditure incurred in an accounting period equal to 32 per cent of the lowest of—

1. the eligible expenditure amount,
2. 80 per cent of the qualifying expenditure, and
3. €25,000,000.

“qualifying digital game” means a digital game in respect of which the Minister has issued a final certificate.

“qualifying expenditure”, in relation to either an interim digital game or a qualifying digital game, is expenditure of the types specified in regulations, which is incurred by a digital games development company on the design, production and testing of a digital game, being expenditure which, for corporation tax purposes, is allowable as a deduction in computing, or against, the income of the digital games development company from the trade of developing digital games, which is chargeable under Case I of Schedule D.

“Rescuing & Restructuring Guidelines” is defined as the 2014 Commission Guidelines for State aid for rescuing and restructuring non-financial undertakings in difficulty.

“the Minister” means the Minister for Culture, Communications and Sport.

“undertaking” is defined as meaning a business grouping that would be regarded as an undertaking for the purposes of the Rescuing & Restructuring Guidelines.

“undertaking in difficulty” is given the same meaning as in the Rescuing & Restructuring Guidelines.

“valid claim”, in relation to an interim digital games corporation tax credit or a digital games corporation tax credit, means a claim which is made under and in accordance with section 481A, and in respect of which all information which may reasonably be required to enable the Revenue Commissioners to determine if, and to what extent, the credit is due to a digital games development company in respect of an accounting period, has been provided by that company.

Application for certification

Interim certification

(2) A digital games development company may apply to the Minister for either an interim certificate, in respect of a digital game to be developed by the company, or a final certificate in the case of a digital game developed and completed by the company.

(3) Applications for interim or final certificates are to be made on forms approved by the Minister and contain such information as is set out in regulations.

(4) The Minister may issue an interim certificate following receipt of an application from a digital games development company, subject to subsection (5) and in accordance with regulations, stating

• that the certificate is an interim certificate,
• that the digital game may be treated as an interim digital game for the purposes of the section, and
• the expiry date of the interim certificate.

(5) In considering whether to issue an interim certificate, the Minister must consider:

• (5)(a) whether the digital game as proposed is likely to be an eligible digital game when completed, and,
• (5)(b) any contribution which the development of the digital game is expected to make to the promotion and expression of Irish and European culture by reference to the following factors:
  • the cultural content of the game, including its setting, principal characters, language and subject matter;
  • any cultural creativity employed in the development of the game, including innovation in the portrayal of Irish or European culture, the use of materials written or created in Ireland or Europe as the basis for the game, technological innovation or the use of music created by a composer who is a national of or ordinarily resident in the State or an EEA state;
  • the contribution of the game to the development of a concentration of cultural activity, by reference to such matters as the proportion of the creative work carried out in the State or an EEA state, the number of key positions in the development of the game occupied by persons who are nationals of or ordinarily resident in the State or an EEA state, and the proportion of the members of the development team who are nationals of or ordinarily resident in the State or an EEA state;
  • the concomitant cultural contribution of the game, by reference to matters including the educational content of games aimed at children and the inclusion of themes relating to diversity and equality,
  • whether the content of the game promotes the protection, restoration and promotion of sustainable use of Irish or European terrestrial ecosystems or the raising of awareness of the exigencies of increasing environmental sustainability and minimising climate change.

(6) The Minister may specify conditions in the interim certificate including

• in relation to the employment responsibilities of the digital games development company for the development of that digital game, and
• the maximum aid intensity which may be availed of for the development of the digital game by reference to the “Cinema Communication” being the Communication from the Commission (2013/C 332/01).

(7) The Minister may amend or revoke any condition specified in an interim certificate or add to such conditions, by giving notice in writing to the digital games development company and in those circumstances section 481A will apply as if any amended, additional or revoked condition was always reflected in the interim certificate.

(8) On the expiry of an interim certificate, the interim certificate will cease to have effect and is treated as never having had effect unless

• an application has been made in advance of the expiry date to the Minister for a final certificate, and
• on the determination of that application, a final certificate is issued by the Minister.

Final certification

(9) The Minister may issue a final certificate following receipt of an application from a digital games development company, subject to subsection (10) and in accordance with regulations, stating

• that the certificate is a final certificate,
• that the digital game may be treated as a qualifying digital game for the purposes of section 481A.

(10) When considering whether to issue a final certificate the Minister must consider:

• (10)(a) whether the digital game meets the eligibility criteria for certification,
• (10)(b) any contribution which the development of the digital game makes to the promotion and expression of Irish and European culture having regard to the factors set out in subsection (5), and
• (10)(c) where an interim certificate has been issued in respect of the digital game, whether the conditions specified in the interim certificate have been satisfied.

(11) The Minister may specify conditions in the final certificate including

• in relation to the employment responsibilities of the digital games development company for the development of that digital game, and
• the maximum aid intensity which may be availed of for the development of the digital game by reference to the “Cinema Communication” being the Communication from the Commission (2013/C 332/01).

(12) The Minister may amend or revoke any condition specified in a final certificate or add to such conditions, by giving notice in writing to the digital games development company and in those circumstances section 481A will apply as if any amended, additional or revoked condition was always reflected in the certificate.

Claims for the digital games corporation tax credit

(13) A digital games development company shall not make a claim for an interim digital games corporation tax credit under subsection (19) or a digital games corporation tax credit under subsection (20) if any of the following apply:

1. (13)(a) there has not been issued to the digital games development company either an interim certificate, as respects claims under subsection (19) for the interim digital games corporation tax credit, or a final certificate, as respects claims under subsection (20) for the digital games corporation tax credit, by the Minister in respect of that digital game,
2. (13)(b) the interim certificate, if issued, has expired and a final certificate has not been issued by the Minister in respect of that digital game,
3. (13)(c) the digital games development company, any company controlled by the digital games development company and the majority shareholders of the digital games development company is not tax compliant,
4. (13)(d) the qualifying expenditure amount is less than €100,000,
5. (13)(e) the company is an undertaking in difficulty,
6. (13)(f) any company in an undertaking of which the digital games development company is part is the subject of an outstanding recovery order made by the Commission for illegal State aid,
7. (13)(g) the digital games development company is resident in an EEA State and does not carry on business in the State through a branch or agency, or
8. (13)(h) has not been carrying on the trade of developing digital games on a commercial basis with a view to the realisation of profit, and that are wholly or principally to be made available to the public, for a period of less than 12 months prior to making a claim.

Conditions in relation to producer companies

(14) A digital games development company may not make a claim for an interim digital games corporation tax credit under subsection (19) or a digital games corporation tax credit under subsection (20) if:

(14)(e) (e) there is no commercial rationale for the corporate structure proposed for either the production, financing, distribution or sale of the digital game, or for all of those purposes,

(14)(f) (f) the corporate structure would hinder the Revenue Commissioners in verifying compliance with the conditions governing the relief, or

(14)(g) (g) the company does not have such information and records available in advance of making a claim as the Revenue Commissioners may require to determine that any claim made is in compliance with the section.

Expenditure which may not be included in a claim

(14A) A claim for either the interim digital games corporation tax credit or the digital games corporation tax credit shall not include expenditure where:

• (14A)(a) the expenditure or any particular item of expenditure in the claim is inflated,
• (14A)(b) the company has obtained relief under Part 29 Patents, Scientific and Certain Other Research, Know-How and Certain Training in respect of the expenditure,
• (14A)(c) the company has obtained relief under section 481 Relief for investment in films in respect of the expenditure, or
• (14A)(d) the expenditure has been or is to be met directly or indirectly by grant assistance or any other assistance which is granted by or through—
  1. the State or another Member State of the European Union,
  2. any board established by statute, any public or local authority or any other agency of the State or another Member State or an institution, office, agency or other body of the European Union, or
  3. a state, other than the State or a Member State and any board, authority, institution, office, agency or other body in such a state.

Consultation by the Revenue Commissioners with other persons

(15) In carrying out their functions under the section, the Revenue Commissioners may consult with any person, agency or body of persons and may disclose any detail of the company’s application, where necessary, for the purposes of such consultations. This includes where there is reason to believe that financial arrangements not allowed under subsection (16)(a) have been entered into.

Circumstances in which a company will not be regarded as a digital games development company

(16) Subsection (16) provides that a company will not be regarded as a digital games development company if any of the following apply:

1. (16)(a) if the financial arrangements which the company enters into in relation to the digital game are:
   • financial arrangements of any type with a person resident, registered or operating in a country other than the State or an EEA State, or other than a country with which Ireland has a Double Taxation Agreement under section 826(1), or,
   • financial arrangements under which funds are channeled, directly or indirectly, to or through a territory other than the State or an EEA State, or other than a country with which Ireland has a Double Taxation Agreement unless subclauses (A), (B) and (C) apply.
   These subclauses set out the circumstances in which a digital games development company that enters into the type of financial arrangements to which subsection (16) relates shall nonetheless be regarded as a digital games development company which are as follows:
   1. where the arrangements relate to the development of the game in a territory other than the State or an EEA State, or a country with which Ireland has a Double Taxation Agreement under section 826(1),
   2. the digital games development company has sufficient records to verify the amount of each item of expenditure in the territory and
   3. the digital games development company has such records in place to substantiate such expenditure in advance of making a claim for the digital games corporation tax credit.
2. (16)(b) a company will not be regarded as a digital games development company unless it provides evidence to vouch each item of expenditure in the State, or elsewhere, on the development of the digital game when requested to do so by the Revenue Commissioners, for the purposes of verifying compliance with the provisions governing the relief. This requirement applies whether expenditure is expended by the company or by any other person engaged, directly or indirectly, by the company to provide goods, services or facilities in relation to the digital game. In particular the evidence provided must include:
   1. records required to be kept or retained by the company by virtue of section 886 (for example, accounts, books of account, documents etc. relating to all sums of money received or expended in the course of the carrying on of the trade, all purchases and sales of goods and services, the assets and liabilities of the trade and all transactions which constitute the acquisition or disposal of an asset for CGT purposes).
   2. similar records required to be maintained by any other person under section 886, or which would be so required if that other person was subject to the provisions of that section.
3. (16)(c) a company shall not be a digital games development company unless the company provides a copy of the game to the Revenue Commissioners when requested to do so for the purposes of verifying compliance with the section or with any condition specified in a certificate issued by the Minister.
4. (16)(d) a company will not be regarded as a digital games development company unless the company:
   • notifies the Minister in writing of the date of completion of the game, and
   • provides to the Minister copies of the game in the format and manner specified in regulations.
5. (16)(e) a company will not be regarded as a digital games development company unless the company makes a claim under subsection (20) and has available prior to making such a claim a compliance report, in the format and manner specified in regulations, which proves to the satisfaction of the Revenue Commissioners that the provisions of this section which relate to the company and the digital game have been met and that any conditions attaching to an interim or final certificate have been met, and,
6. (16)(f) a company will not be regarded as a digital games development company if it ceases to carry on the trade of developing digital games within 12 months of submitting a compliance report.

Regulations

(17) The Revenue Commissioners may make regulations relating to the administration of the relief with the consent of the Minister for Finance, and with the consent of the Minister for Culture, Communications and Sport in relation to the matters to be considered by that Minister regarding the issue of interim and final certificates.

The regulations may include provisions as follows:

1. (17)(a) governing the application for interim certification or final certification, the timing of such applications, and the information and documents to be provided in or with such applications,
2. (17)(b) the information required to be included in the application made to the Minister by a digital games development company,
3. (17)(c) specifying the time within which a digital games development company shall notify the Minister of the completion of the development of a qualifying digital game,
4. (17)(d) specifying the time within which, and the format, number of copies and manner in which, a qualifying digital game shall be provided to the Minister,
5. (17)(e) governing the records that a digital games development company shall maintain or provide to the Revenue Commissioners,
6. (17)(f) governing the period for which, and the place at which, such records shall be maintained,
7. (17)(g) specifying the form and content of the compliance report that must be available in accordance with subsection (16)(f), the manner in which such report shall be made and verified, and the documents to accompany the report,
8. (17)(h) governing the type of expenditure which may be treated as qualifying or eligible expenditure on the development of a qualifying digital game,
9. (17)(i) specifying the currency exchange rate to be applied to expenditure on the production of a qualifying digital game,
10. (17)(j) governing financial arrangements in accordance with subsection (7)(a).

Regulations governing qualifying and eligible expenditure

(18) When making regulations under subsection (17)(h) governing the type of expenditure which may be treated as qualifying or eligible expenditure on the development of a qualifying digital game, shall have regard to—

1. (18)(a) whether the type of expenditure relates to design, production or testing and the stage of development of the game in which the expenditure is incurred,
2. (18)(b) whether the type of expenditure is directly related to design, production and testing, and
3. (18)(c) the extent to which the type of expenditure is incurred directly by the digital games development company on design, production or testing.

Making a claim for the interim digital games corporation tax credit

(19) Where the Minister has issued an interim certificate, and the provisions of section 481A have been complied with, a digital games development company may make a claim in advance of the completion of the game for the interim digital games corporation tax credit provided—

1. the interim certificate has not expired, and
2. the aggregate of all claims made pursuant to the interim certificate does not exceed 32% of €25,000,000.

Timing of a claim for the interim digital games corporation tax credit

(19A) Claims for the interim digital games corporation tax credit must be made within 12 months of the end of the accounting period in which the expenditure, giving rise to the claim, is incurred and must be made in the return in respect of the accounting period in which the expenditure giving rise to the claim is incurred.

Making a claim for the digital games corporation tax credit

(20) Where the Minister has issued a final certificate, and the provisions of section 481A have been complied with, a digital games development company may make a claim following completion of the game for the digital games corporation tax credit less any amount already claimed pursuant to subsection (19).

Corporation tax return

(21) A claim for the digital games corporation tax credit under subsection (20) is made in the corporation tax return in respect of the accounting period in which the last of the expenditure giving rise to the claim is incurred, as provided for in paragraph (a) of subsection (21A).

Timing of a claim for the digital games corporation tax credit

(21A) A digital games development company has until 12 months from the end of the accounting period in which the last of the expenditure giving rise to a claim for the digital games corporation tax credit is incurred to make a claim. Where, however, a digital games development company receives the final cultural certificate in respect of the game after a date which is 3 months before the expiry of the 12-month period, the company has an extended period of 3 months from the date on which the final certificate is issued to make a claim.

Treatment of the credit as overpayment or payment of the credit to the company

(22) The digital games development company shall specify in relation to a claim for either the interim digital games corporation tax credit or the digital games corporation tax credit whether the amount or any portion of the amount of the credit is to be:

1. (22)(a) treated as an overpayment of tax, for the purposes of section 960H, or
2. (22)(b) paid to the company by the Revenue Commissioners.

(22A) Where a digital games development company has made a claim for either the interim digital games corporation tax credit or the digital games corporation tax credit, the amount of the credit shall be paid or offset in full by the Revenue Commissioners within 48 months of a valid claim being made.

(22B) No amount of the interim digital games corporation tax credit or the digital games corporation tax credit shall be paid or offset unless a valid claim has been made.

(22C) The Revenue Commissioners may examine a claim subsequent to any payment or offset having been made, and make or amend an assessment, as the case may be, under Chapter 5 of Part 41A.

(22D) Neither the interim digital games corporation tax credit nor the digital games corporation tax credit, if any, will be income of the company or another company for corporation tax purposes.

(22E) Any claim for either the interim digital games corporation tax credit or the digital games corporation tax credit, will be treated as an amount of tax refundable, for the purposes of section 851A and 851B, Chapter 4 of Part 38 and Part 47.

(22F) Where a company specifies that either the interim digital games corporation tax credit or the digital games corporation tax credit is to be offset against the company’s corporation tax liability for the accounting period, then this amount may be taken into account for the purposes of calculating preliminary corporation tax.

(25) Where a claim for the interim digital games corporation tax credit or the digital games corporation tax credit has been made and an amount has not yet been paid out by Revenue, the amount for the purposes of section 1077F (the section providing for penalties for deliberately or carelessly making incorrect returns, failing to make certain returns, etc.) which will attract a penalty, will be the amount so claimed and not yet paid out.

(26)(a) Where an amount was paid or offset under subsection (22) in respect of a claim for the interim digital games corporation tax credit or the digital games corporation tax credit, and it is subsequently found that the claim is not as authorised by this section, then the company, any director of the company, or the majority shareholders of the company shall be liable to tax in an amount equal to 4 times, in the case of a company, or one hundred fortieths in the case of an individual, of the amount of the interim digital games corporation tax credit or the digital games corporation tax credit as is not authorised.

(26)(b) Where an amount is charged to tax under this subsection, then no loss, deficit, expense or credit shall be allowed to shelter the liability raised and this Case IV amount will not form part of the close company surcharge calculation.

(27) The circumstances in which a claim is not authorised include any circumstances where the amount was claimed under either or both subsection (19) and subsection (20) or paid or offset under subsection (22A).

(28) Where a claim has been made for either the interim digital games corporation tax credit or the digital games corporation tax credit that is not as authorised by section 481A, and an assessment is made, the amount charged shall carry interest as determined in accordance with subsection (2)(c) of section 1080 as if a reference to the date when the tax became due and payable were a reference to the date the amount was paid or offset under section 960H by the Revenue Commissioners.

Publication requirements

(29) Revenue’s publication obligations in accordance with State aid transparency requirements are as follows:

1. the name of the company;
2. the name of the digital game;
3. the number of the certificate of incorporation of the company;
4. in respect of the principal activity carried on by the company, the NACE classification code
5. the amount of interim digital games corporation tax credit or digital games corporation tax credit, as the case may be,
6. whether the company is—
   1. a category of enterprise referred to in Article 2.1 of Annex 1 to Commission Regulation (EU) No. 651/2014 of 17 June 2014,¹ or
   2. a category of enterprise which is larger than the categories of enterprise referred to in subparagraph (i);
7. the territorial unit, within the meaning of the NUTS Level 2 classification specified in Annex 1 to Regulation (EC) No. 1059/2003 of the European Parliament and of the Council of 26 May 2003² as amended, in which the company is located.

(30) The Department of Culture, Communications and Sport is deemed to be a service provider with respect to the administration of the credit for the purposes of section 851A.

(31) No amount of an interim digital games corporation tax credit or a digital games corporation tax credit may be paid or offset under subsection (22A) by the Revenue Commissioners in respect of an interim or final certificate issued after 31 December 2031.

(32) Every regulation made by the Revenue Commissioners under section 481A shall be laid before Dáil Éireann as soon as may be after it is made. This is in line with the customary procedure in relation to the laying of statutory instruments and provides Dáil Éireann with the opportunity to annul the regulations, if it so wishes, within the next 21 days on which Dáil Éireann has sat after the regulations are laid before it.

Relevant Date: Finance Act 2025