The chair of the European Game Developers Federation has said that determining which development projects should be given tax breaks off the back of a cultural test is a flawed system.
France’s tax breaks were given the go ahead at the end of 2007, and like a proposed system for the UK, rely on passing a test to determine if they are culturally significant.
“The cultural test is a problem,” said Guillaume de Fondaumiere, who is also co-CEO of Heavy Rain developer Quantic Dream.
“It’s definitely a problem, and when I negotiated both with the French government and the European Commission I had to give in on a number of criteria – because state aids are only allowed under EU law under the famous cultural exception.
“When you look at EU rules, you have to ask: ‘Actually, what is culture?’ It’s a national decision, so it’s kind of weird that we, as the videogame industry, have to work with standards that other cultural areas don’t have to follow.”
The UK’s Digital Britain report has prompted the Department of Culture, Media and Sport to ask the UK industry for evidence for a culturally-based tax break for the sector, but de Fondaumiere is concerned that by the time its accepted that videogames have cultural relevance, it could be too late for a weakening European development community.
“To me, all games are cultural. Videogames aren’t just a form of entertainment, but a true form of cultural expression, and I think that in twenty years’ time this will be a given. No one will dispute that any more.
“So we’ve got a rocky twenty years in front of us, and we have to make sure this recognition doesn’t happen when we no longer have an industry in Europe.”
de Fondaumiere also points to Canadian evidence that investment in tax breaks is not dead money, are are vital to stimulating business.
“We know that tax breaks are extremely effective in stimulating an industry, and I think again that Montreal and Quebec have shown us the way. If you listen to representatives of Invest in Quebec, they’ll tell you that they’ve invested hundreds of million of dollars in the industry. I think the last time I was presented the numbers they’d invested CAD 400 million, with a return on that investment of CAD 600 million.
“So I think it’s high time for governments, and the EU, to understand that money given in the form of tax breaks to the industry is not money thrown away. It’s an investment with a very high return, so it’s time that we had those breaks.”
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