Following the launch of an EU investigation into proposed tax credit for UK game developers, the European Games Developer Foundation (EGDF) has voiced its support of the tax cuts, arguing they would be beneficial to Europe as a whole.

EGDF issues support for UK tax cuts
LittleBigPlanet is developed in the UK by Media Molecule. (Credit: Media Molecule)

The tax cuts were originally proposed by the Association for UK Interactive Entertainment (UKIE) which argued that in order to attract investment from game developers, Britain needed to provide the same level industry tax credits currently afforded in countries such as Canada and France.

The Independent Game Developer's Association (Tiga) has also issued support for the tax breaks and urged for them to be introduced as quickly as possible.

However, a European Commission investigation, led by Commission vice-president Joaquín Almunia, raised concerns about the proposals, arguing they would give British developers an anti-competitive advantage over studios based in other European countries.

But now the EGDF, a representative body comprised of European game development staff, is arguing that tax breaks for the UK would in fact aid development across the European Union. In an official statement, the organisation said it supported tax breaks for British developers:

"Member organizations within the EGDF, including the Finnish games producers' association, the Spanish games producers' association, the German association and the French association, have shown solidarity with Tiga and the UK Government and submitted statements supportive of the proposed Games Tax Relief.

"EDGF member organisations do not believe that the introduction of Games Tax Relief in the UK will distort the EU market. The European game development sector competes mainly on a global level with other game developers worldwide. The introduction of a video game tax relief for France in 2008 did not distort the EU market, nor did it have an impact on the other national EU markets. The same is expected with the UK Games Tax Relief."


Guillaume de Fondaumière, EGDF chairman and co-CEO at Heavy Rain developer Quantic Dream added:

"The United Kingdom has historically been Europe's stronghold when it comes to video games development. For several years now, however, we have witnessed an alarming brain drain and entire studios closing down as global investment has been diverted to other countries, especially in North America, which offer tax incentives. This in turn has reduced the UK's capacity to develop culturally British video games.

"The UK's Games Tax Relief scheme is really about saving this stronghold on a European scale by encouraging developers and publishers to produce innovative and culturally British titles. We strongly support the measure and hope it will be retroactive from April 1st2013 onwards. Europe needs this impetus, and we need it this year."

The EC investigation into the tax proposals, which began in April, remains open.

IBTimes UK has been visiting British game developers as part of a new series, Game Studio Spotlight. Several studios, including Codemasters, Hello Games, Born Ready Games and Playground Games have argued in favour of the proposed tax cuts, saying they would be beneficial to small start-up companies.