The digital games tax offset (DGTO) has been given royal assent and is now law. The DGTO intends to support businesses in the digital gaming sector.
The DGTO allows eligible companies that engage in games development activities to claim a refundable tax offset of up to 30% on qualifying games development expenditure, subject to a minimum spend of $500,000. The offset is available on eligible expenses incurred after 1 July 2022, and your application will be subject to approval from the Minister of Arts.
If your current spending on digital games is less than $500,000 per annum, then you have the option to apply for a funding grant from Screen Australia for up to $150,000. Funding is currently suspended for the 2022–23 income year, but additional funding will be announced later in the year. We encourage you to sign up for Screen Australia’s Games: Expansion Pack newsletter to ensure that you get the new funding announcement when it happens.
To qualify for the DGTO, your gaming development expenditure must contribute towards:
- completing a new digital game
- porting a completed digital game to a new platform, or
- ongoing development work on completed digital games in an income year.
The amount of the DGTO is 30% of the sum of all amounts as determined in the certificates issued by the Arts Minister. The maximum tax offset that can be claimed is $20 million per income year.
The digital game must be developed for entertainment and educational purposes for the general public and be primarily operated and played through the internet. Games that encourage or allow gambling are ineligible.
Should you have any queries about this new offset and would like to discuss further, please don’t hesitate to contact us.
