481A. Relief for investment in digital games

(1) In this section—

“date of completion”, in relation to a qualifying digital game, means the date on which the game is first made available to the public or, where the game is commissioned by an undertaking other than the digital games development company, the date on which the game is first provided by the digital games development company to the undertaking and ‘completed’ shall be construed accordingly;

“digital game” means a game which—

(a) integrates digital technology,

(b) incorporates not less than three of the following classes of information, in digital form:

(i) text;

(ii) sound;

(iii) still images;

(iv) animated images,

(c) is capable of being published on an electronic medium, and

(d) is 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;

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“digital games development company” means a company that—

(a) is resident in the State, or is resident in a European Economic Area (EEA) state other than the State and carries on business in the State through a branch or agency,

(b) carries on a trade of developing digital games that are wholly or principally to be made available to the public on a commercial basis with a view to the realisation of profit,

(c) has delivered to the Collector-General a return, in accordance with section 959I, in respect of—

(i) the accounting period referred to in paragraph (a) of the definition of “qualifying period”, or

(ii) each accounting period ending in the qualifying period, referred to in paragraph (b) of that definition,

as the case may be, and

(d) is not, or is not part of, an undertaking which would be regarded as an undertaking in difficulty;

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“digital games development company” means a company that—

(a) is resident in the State, or is resident in an EEA State,

(b) carries on a trade of developing digital games that are wholly or principally to be made available to the public on a commercial basis with a view to the realisation of profit, and

(c) is not, or is not part of, an undertaking which would be regarded as an undertaking in difficulty;

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“digital games corporation tax credit”, in relation to a qualifying digital game, means an amount equal to 32 per cent of the lowest of—

(a) the eligible expenditure,

(b) 80 per cent of the qualifying expenditure, and

(c) €25,000,000;

“eligible digital game” means a digital game which is—

(a) developed on a commercial basis with a view to the realisation of profit,

(b) wholly or mainly to be made available to the public,

(c) an exempted work (within the meaning of the Video Recordings Act 1989), and

(d) which is not produced solely or mainly—

(i) as part of a promotional campaign or advertising for a specific product or undertaking, or

(ii) as a game of skill or chance for a prize comprising money or money’s worth;

“eligible expenditure” means the portion of the qualifying expenditure that is expended on the development of the digital game in the State or the EEA;

“final certificate” shall be construed in accordance with subsection (9);

“interim certificate” shall be construed in accordance with subsection (4);

“interim digital game” means a digital game in respect of which—

(a) an interim certificate has been issued, and

(b) no final certificate has been issued;

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

(a) the eligible expenditure amount,

(b) 80 per cent of the qualifying expenditure, and

(c) €25,000,000;

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

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“qualifying expenditure”, in relation to an interim digital game or a qualifying digital game, is expenditure incurred by the digital games development company on the design, production and testing of a digital game;

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“qualifying expenditure”, in relation to an interim digital game or a qualifying digital game, is expenditure (the types of which are specified in regulations made under subsection (17)) incurred by the digital games development company on the design, production and testing of a digital game;

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“qualifying period”, in relation to digital games corporation tax credit means—

(a) the accounting period of the digital games development company, in respect of which the specified return date for the chargeable period, within the meaning of section 959A, immediately precedes the date the claim referred to in subsection (19) or subsection (20), as the case may be, was made, or

(b) where the accounting period referred to in paragraph (a) is a period of less than 12 months, the period—

(i) commencing on the date on which the most recently commenced accounting period, which commences on or before the date which is 12 months before the end of the accounting period referred to in paragraph (a), commences, and

(ii) ending on the date the accounting period referred to in paragraph (a) ends,

and references in subsections (22) and (23) to corporation tax and in subsection (23) to corporation tax paid shall be construed accordingly;

“Rescuing and Restructuring Guidelines” means the Communication of the Commission on Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty¹

“specified amount” has the meaning assigned to it by subsection (23);

“the Minister” means the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media;

“undertaking” means the relevant economic unit that would be regarded as an undertaking for the purposes of the Rescuing and Restructuring Guidelines;

“undertaking in difficulty” shall be construed in accordance with section 2.2 of the Rescuing and Restructuring Guidelines.

(2) Subject to the provisions of this section, a digital games development company may make an application to the Minister—

(a) in relation to a digital game that is to be developed by the company, for the issue by the Minister of an interim certificate, or

(b) in relation to a digital game that is developed and completed by the company, for the issue by the Minister of a final certificate.

(3) An application for an interim or final certificate under subsection (2) shall be in a form approved by the Minister for that purpose and shall contain such information as may be specified in regulations made under subsection (17).

(4) The Minister may, following an application by a digital games development company under subsection (2)(a), subject to subsection (5) and in accordance with regulations made under subsection (17), issue to the digital games development company a certificate (in this section referred to as an “interim certificate”) stating—

(a) that the certificate is an interim certificate,

(b) that the digital game is to be treated as an interim digital game for the purposes of this section, and

(c) the expiry date of the interim certificate.

(5) In considering whether to issue the interim certificate referred to in subsection (4), the Minister shall have regard to—

(a) whether the digital game as proposed is likely to be an eligible digital game when completed, and

(b) the 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:

(i) the cultural content of the game, including its setting, principal characters, language and subject matter;

(ii) 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 Ireland or another EEA state;

(iii) 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 Ireland or another EEA state, the number of key positions in the development of the game occupied by persons who are nationals of or ordinarily resident in Ireland or another EEA state, and the proportion of the members of the development team who are nationals of or ordinarily resident in Ireland or another EEA state;

(iv) 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;

(v) 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) Where an interim certificate is issued, the Minister, having regard to the criteria specified in subsection (5), shall specify in the interim certificate such conditions, as the Minister may consider proper, including conditions—

(a) in relation to the employment-related responsibilities of the digital games development company in the development of that digital game, or

(b) in relation to, in respect of the Communication from the Commission (2013/C 332/01)², the maximum aid intensity.

(7) The Minister may amend or revoke any condition (including a condition added by virtue of this subsection) specified in an interim certificate, or add to such conditions, by giving notice in writing to the digital games development company concerned of the amendment, revocation or addition, as the case may be, and this section shall apply as if—

(a) a condition so amended or added by the notice was specified in the interim certificate, and

(b) a condition so revoked was not specified 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—

(a) an application has been made in advance of the expiry date to the Minister under subsection (2)(b), and

(b) on the determination of the application, a final certificate is issued by the Minister.

(9) The Minister may, following an application by a digital games development company under subsection (2)(b), subject to subsection (10) and in accordance with regulations made under subsection (17), issue to the digital games development company a certificate (in this section referred to as a “final certificate”) stating—

(a) that the certificate is a final certificate, and

(b) that the digital game is to be treated as a qualifying digital game for the purposes of this section.

(10) In considering whether to issue a final certificate, the Minister shall have regard to the following criteria—

(a) whether the digital game as completed is an eligible digital game,

(b) the contribution which the digital game makes to the promotion and expression of Irish or European culture, by reference to the matters referred to in subparagraphs (i) to (v) of subsection (5)(b), and

(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) Where a final certificate is issued, the Minister, having regard to the criteria specified in subsection (10), shall specify in the final certificate such conditions, as the Minister may consider proper, including a condition—

(a) in relation to the employment-related responsibilities of the digital games development company for the development of that digital game, and

(b) in relation to, in respect of the Communication from the Commission (2013/C 332/01), the maximum aid intensity.

(12) The Minister may amend or revoke any condition (including a condition added by virtue of this paragraph) specified in a final certificate, or add to such conditions, by giving notice in writing to the digital games development company concerned of the amendment, revocation or addition, as the case may be, and this section shall apply as if—

(a) a condition so amended or added by the notice was specified in the final certificate, and

(b) a condition so revoked was not specified in the final certificate.

(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) where—

(a) there has not been issued to the digital games development company either an interim certificate, as respects claims made under subsection (19), or a final certificate, as respects claims made under subsection (20), by the Minister in respect of the digital game concerned,

(b) as respects claims made under subsection (19), the interim certificate has expired,

(c) the digital games development company, any company controlled by the digital games development company and each person who is either the beneficial owner of, or able directly or indirectly to control, more than 15 per cent of the ordinary share capital of the digital games development company (in this paragraph referred to as a ‘relevant person’), as the case may be, is not in compliance with all of the obligations imposed by the Tax Acts, the Capital Gains Tax Acts or the Value-Added Tax Consolidation Act 2010 in relation to—

(i) the payments or remittances of taxes, interest or penalties required to be paid or remitted under those Acts,

(ii) the delivery of returns, and

(iii) requests to supply to an officer of the Revenue Commissioners accounts of, or other information about, any business carried on, by the digital games development company, or relevant person, as the case may be,

(d) as respects a claim made under subsection (20), the qualifying expenditure amount is less than €100,000,

(e) the digital games development company is an undertaking in difficulty, ^[4]>or^<[4]

(f) any company in an undertaking of which the digital games development company is part is subject to an outstanding recovery order following a previous decision of the European Commission that declared an aid illegal and incompatible with the internal ^[5]>market.^<[5][5]>market,^<[5]

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(g) the digital games development company is resident in an EEA State other than the State and does not carry on business in the State through a branch or agency, or

(h) the digital games development company has not delivered to the Collector-General a return, in accordance with section 959I, in respect of—

(i) the accounting period referred to in paragraph (a) of the definition of “qualifying period”, or

(ii) each accounting period ending in the qualifying period, referred to in paragraph (b) of that definition,

as the case may be.

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(14) 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) where—

(a) it would be reasonable to consider that any particular item of expenditure in the claim is inflated,

(b) the company has obtained relief under Part 29 in respect of the expenditure,

(c) the company has obtained relief under section 481 in respect of the expenditure,

(d) the expenditure has been met directly or indirectly by grant assistance or any other assistance which is granted by or through—

(i) the State or another Member State of the European Union,

(ii) any board established by statute, any public or local authority or any other agency of the State or ^[7]>another relevant Member State^<[7][7]>another Member State^<[7] or an institution, office, agency or other body of the European Union, or

(iii) a state, other than the State or a Member State referred to in subparagraph (i), and any board, authority, institution, office, agency or other body in such state,

(e) there is no commercial rationale for the corporate structure of the digital games development company—

(i) for the development, financing, distribution or sale of the digital game, or

(ii) for all of the purposes referred to in subparagraph (i),

(f) the corporate structure of the digital games development company would hinder the Revenue Commissioners in verifying compliance with any of the provisions governing the relief, or

(g) prior to making a claim, the company does not have such information and records as the Revenue Commissioners may reasonably require for the purposes of determining whether that claim complies with this section.

(15) In carrying out their functions under this section, the Revenue Commissioners may—

(a) consult with any person, agency or body of persons, as in their opinion may be of assistance to them,

(b) notwithstanding any obligation as to secrecy or other restriction on the disclosure of information imposed by, or under, the Tax Acts or any other statute or otherwise, disclose any detail in an application or claim of a digital games development company under this section which they consider necessary for the purposes of such consultation, and

(c) where they have reason to believe that financial arrangements have been entered into in contravention of subsection (16)(a), the Revenue Commissioners may seek any information they consider appropriate in relation to the arrangements or in relation to any person who is, directly or indirectly, a party to the arrangements.

(16) A company shall not be regarded as a digital games development company in respect of an interim digital game or a qualifying digital game for the purposes of this section—

(a) where the financial arrangements which the company enters into in relation to the interim digital game or the qualifying digital game are—

(i) financial arrangements of any type with a person resident, registered or operating in a territory other than—

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(I) a Member State of the European Communities, or

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(I) an EEA State, or

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(II) a territory with the government of which, arrangements having the force of law by virtue of section 826(1), have been made,

or

(ii) financial arrangements under which funds are channelled, directly or indirectly, to, or through, a territory other than a territory referred to in clause (I) or (II) of subparagraph (i),

other than where—

(A) those arrangements relate to the development of part of the interim digital game or the qualifying digital game in a territory other than a territory referred to in clause (I) or (II) of subparagraph (i),

(B) the digital games development company has sufficient records to enable the Revenue Commissioners to verify, in the case of development of an interim digital game or a qualifying digital game in such a territory, the amount of each item of expenditure on the development of the interim digital game or the qualifying digital game expended in the territory, whether expended by the digital games development company or by any other person, and

(C) the digital games development company has such records in place to substantiate such expenditure in advance of making a claim under either or both of subsection (19) and subsection (20),

(b) without prejudice to the generality of section 886, where the company fails to provide, when requested to do so by the Revenue Commissioners, for the purposes of verifying compliance with the provisions governing the relief or with any condition specified in a certificate issued by the Minister under subsection (4) or subsection (9), evidence to vouch each item of expenditure in the State or elsewhere on the development of the interim digital game and the qualifying digital game, whether expended by the digital games development company or by any other person engaged, directly or indirectly, by the digital games development company to provide goods, services or facilities in relation to such development and, in particular, such evidence shall include—

(i) records required to be kept or retained by the digital games development company by virtue of section 886, and

(ii) records, in relation to the development of the interim digital game and the qualifying digital game, required to be kept or retained by that other person by virtue of section 886, or which would be so required if that other person were subject to the provisions of that section,

(c) in relation to a claim under subsection (20), where the company fails to provide, when requested to do so by the Revenue Commissioners, for the purposes of verifying compliance with the provisions governing the relief or with any condition specified in a certificate issued by the Minister under subsection (9), a copy of the digital game in such format and manner required under paragraph (d)(ii),

(d) where the company, within such time as is specified in the regulations made under subsection (17)—

(i) fails to notify the Minister in writing of the date of completion of the development of the qualifying digital game, and

(ii) fails to provide to the Minister a copy of the completed digital game in such format and manner as may be specified in those regulations,

(e) unless the company makes a claim under subsection (20), within the time referred to in paragraph (d), and has available, prior to making that claim, a compliance report, in such format and manner as is specified in the regulations made under subsection (17), which provides proof that—

(i) the provisions of this section in so far as they apply in relation to the company have been met,

(ii) where an interim certificate has been issued to the company in relation to an interim digital game, any conditions attaching to the interim certificate have been fulfilled, and

(iii) any conditions attaching to the final certificate issued to the company in relation to a qualifying digital game have been fulfilled,

or

(f) where the company ceases to carry on the trade referred to in paragraph (b) of the definition of ‘digital games development company’ before a time which is 12 months after the date referred to in paragraph (d).

(17) The Revenue Commissioners, with the consent of the Minister for Finance and, in relation to the matters specified in paragraphs (a) to (d), with the consent of the Minister, shall make regulations with respect to the administration by the Revenue Commissioners of the relief under this section and, without prejudice to the generality of the foregoing, regulations under this subsection may include provisions—

(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,

(b) the information required to be included in the application made to the Minister by a digital games development company,

(c) specifying the time within which a digital games development company shall notify the Minister of the date of completion of the development of a qualifying digital game,

(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,

(e) governing the records that a digital games development company shall maintain or provide to the Revenue Commissioners,

(f) governing the period for which, and the place at which, such records shall be maintained,

(g) specifying the form and content of the compliance report that must be available in accordance with subsection (16)(e), the manner in which such report shall be made and verified, and the documents to accompany the report,

(h) specifying the type of expenditure which may be treated as qualifying or eligible expenditure on the development of an interim digital game or a qualifying digital game,

(i) specifying the currency exchange rate to be applied to expenditure on the development of an interim digital game or a qualifying digital game,

(j) governing financial arrangements in accordance with subsection (16)(a), and

(k) governing the payment of the specified amount by the Revenue Commissioners to the digital games development company.

(18) The Revenue Commissioners shall, for the purpose of making regulations under subsection (17) in relation to the matter referred to in paragraph (h) of that subsection have regard to—

(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,

(b) whether the type of expenditure is directly related to design, production and testing, and

(c) the extent to which the type of expenditure is incurred directly by the digital games development company on design, production or testing.

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

(a) the claim is made within 12 months of the end of the accounting period in which the expenditure giving rise to the claim is incurred,

(b) the interim certificate has not expired, and

(c) the aggregate of all claims made pursuant to the interim certificate does not exceed 32 per cent of €25,000,000.

(20) Where the Minister has issued a final certificate in relation to a qualifying digital game to a digital games development company and the provisions of this section have been complied with, a digital games development company may make a claim for the digital games corporation tax credit, less the amount, if any, already claimed in respect of the qualifying digital game under subsection (19).

(21) A claim under subsection (19) or (20) shall be made in the return required under Part 41A, the specified return date of which immediately precedes the making of the claim.

(22) Where a digital games development company makes a claim under subsection (19) or (20), the corporation tax of the company, for the qualifying period, shall be reduced by so much of an amount equal to the interim digital games corporation tax credit or the digital games corporation tax credit, as the case may be, as does not exceed that corporation tax and where the qualifying period is a period referred to in paragraph (b) of the definition of “qualifying period”, the corporation tax of an earlier accounting period shall be reduced in priority to the corporation tax of a later accounting period.

(23) Subject to subsection (31), where a digital games development company has made a claim under subsection (19) or (20), and the amount of the credit exceeds the corporation tax of the qualifying period, as reduced by the corporation tax paid by the company in respect of that period, but before any reduction under subsection (22), the excess (in this section referred to as the “specified amount”) shall be paid to the digital games development company by the Revenue Commissioners.

(24) An amount payable by the Revenue Commissioners to a digital games development company under subsection (23) shall be deemed to be an overpayment of corporation tax, for the purposes only of section 960H(2).

(25) A claim in respect of a specified amount shall be deemed, for the purposes of section 1077F, to be a claim in connection with a credit and, for the purposes of determining an amount in accordance with section 1077F(3) or 1077F(5), a reference to an amount of tax that would have been payable for the relevant periods by the person concerned shall be read as if it were a reference to a specified amount.

(26) Where the Revenue Commissioners have paid a specified amount to a digital games development company and it is subsequently found that payment of all or part of the amount is not authorised by this section (in this section referred to as the “unauthorised amount”), then—

(a) the company,

(b) any director of the company, or

(c) any person referred to in subsection (13)(c),

may be charged to tax under Case IV of Schedule D for the accounting period, or year of assessment, as the case may be, in respect of which the payment was made, in an amount equal to—

(i) in the case of a company, 4 times, and

(ii) in the case of an individual, one hundred fortieths,

of so much of the specified amount as is not so authorised.

(27) The circumstances in which an unauthorised amount arises shall include any circumstances where the amount was claimed under either or both subsection (19) and subsection (20), or paid in accordance with subsection (23) and—

(a) the company made a claim contrary to either or both subsection (19) and subsection (20), or

(b) the digital games development company—

(i) fails to satisfy or comply with any condition or obligation under this section or regulations made under this section,

(ii) fails to satisfy or comply with any condition or obligation specified in a certificate, or

(iii) at any time on or before the time referred to in subsection (16)(f) fails to comply with any of the obligations referred to in subsection (13)(c).

(28) Where, in accordance with subsection (26), an assessment is made or amended in respect of a specified amount, the amount so charged shall for the purposes of section 1080 be deemed to be tax due and payable and 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 by the Revenue Commissioners.

(29) Notwithstanding section 851A, where a digital games development company is in receipt of relief from tax under this section, the Revenue Commissioners may disclose the following taxpayer information in accordance with State aid transparency requirements:

(a) the name of the company;

(b) the name of the digital game;

(c) the number of the certificate of incorporation of the company;

(d) in respect of the principal activity carried on by the company, the NACE classification code, as determined in accordance with Regulation (EC) No. 1893/2006 of the European Parliament and of the Council of 20 December 2006³ establishing the statistical classification of economic activities NACE Revision 2 and amending Council Regulation (EEC) No. 3037/90 as well as certain EC Regulations on specific statistical domains;

(e) the amount of interim digital games corporation tax credit or digital games corporation tax credit, as the case may be, granted, by reference to ranges set out in page 30, paragraph 166(vi) of the Guidelines on State Aid to Promote Risk Finance⁴, inserted by Communication from the Commission (2014/C 198/02)⁵;

(f) whether the company is—

(i) a category of enterprise referred to in Article 2.1 of Annex 1 to Commission Regulation (EU) No. 651/2014 of 17 June 2014⁶, or

(ii) a category of enterprise which is larger than the categories of enterprise referred to in subparagraph (i);

(g) 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 2003⁷ amended by Regulation (EC) No. 1888/2005 of the European Parliament and of the Council of 26 October 2005⁸, Commission Regulation (EC) No. 105/2007 of 1 February 2007⁹, Regulation (EC) No. 176/2008 of the European Parliament and of the Council of 20 February 2008¹⁰, Regulation (EC) No. 1137/2008 of the European Parliament and of the Council of 22 October 2008¹¹, Commission Regulation (EU) No. 31/2011 of 17 January 2011¹², Council Regulation (EU) No. 517/2013 of 13 May 2013¹³, Commission Regulation (EU) No. 1319/2013 of 9 December 2013¹⁴, Commission Regulation (EU) No. 868/2014 of 8 August 2014¹⁵, Commission Regulation (EU) No. 2066/2016 of 21 November 2016¹⁶, Regulation (EU) 2017/2391 of the European Parliament and of the Council of 12 December 2017¹⁷, and Commission Delegated Regulation 2019/1755 of 8 August 2019¹⁸, in which the company is located;

(h) the date on which the interim digital games corporation tax credit or digital games corporation tax credit, as the case may be, is granted.

(30) In relation to information provided to the Minister for Tourism, Culture, Arts, Gaeltacht, Sport and Media by a company for the purposes of obtaining an interim or final certificate under this section, the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media, in processing such information, shall, for the purposes of section 851A, be deemed to be engaged as a service provider with respect to the administration of this section.

(31) The Revenue Commissioners shall not pay a specified amount to a digital games development company in respect of an interim or final certificate issued after 31 December 2025.

(32) Every regulation made under this section shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the regulation is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.