An international analysis of tax reliefs, compliance realities, and strategic implications for studios in 2025
As global competition for video game production intensifies, studios are under increasing pressure to make smart, strategic decisions about where to develop, structure, and scale their operations. With over $200 billion in annual value and a growing emphasis on cross-border IP strategy, understanding international tax incentives has become a board-level priority.
Based on our experience advising clients in the gaming sector, Moore Global’s analysis suggests that the most effective location strategies are tailored to a studio’s structure, IP ambitions, and operational model. Optimisation is key, rather than a one-size-fits-all approach.
“As the UK video games development industry continues to grow, so does the Video Games Tax Relief (VGTR)… HMRC have paid out £1.48 billion in relief since VGTR’s inception in 2014, with 525 claims totalling £282 million in the financial year 2022–23.”
Rob Husband, Partner and Head of Video Gaming Team, Moore Kingston SmithThis global analysis outlines the structural, fiscal and operational features that define the world’s most competitive locations for video game development — enabling decision-makers to align incentive strategies with commercial growth.
Comparative Landscape of Game Development Incentives
Tier 1: Cashflow-Optimised Jurisdictions
Canada
Québec, Canada remains the benchmark jurisdiction for immediate liquidity support in the game development sector. However, recent structural changes to its flagship programme require close attention.
The Tax Credit for E-Business Integrating Artificial Intelligence (TCEB) maintains a 30% total rate, but the composition is shifting. From 2025, the refundable portion will gradually decrease from 23% to 20% by 2028, while the non-refundable portion increases from 7% to 10%.
Additionally, a major recalibration affects eligible payroll costs. The previous salary cap of CAD $83,333 has been replaced by a lower exclusion threshold of CAD $18,054, aligned with the basic personal tax credit. This policy change materially adjusts the benefit distribution: higher-compensated roles now attract proportionally greater relief, while entry-level and support roles receive reduced incentives.
United Kingdom
The United Kingdom’s Video Games Expenditure Credit (VGEC) offers a 34% credit on UK development spend, delivering a net 25.5% benefit after corporation tax. The transition from VGTR creates both opportunities and timing considerations—games in production before April 2025 can continue claiming VGTR until March 2027, while new productions must use VGEC from April 2025. The cultural test remains mandatory, requiring 16 of 31 points, but the minimum UK spend requirement has dropped to just 10%.
Australia
Australia’s Digital Games Tax Offset provides a 30% refundable credit with a $20 million cap, stackable with state incentives. New South Wales offers an additional 10% rebate, while Queensland provides a 15% rebate, creating effective rates of 40-45% for qualifying projects.
Tier 2: Strategic Trade-offs Between Rate and Reliability
Ireland
Ireland’s Digital Games Tax Credit offers a 32% refundable credit, capped at €25 million per project — one of the highest thresholds globally. The cultural test and interim certification process support steady cash flow, while Ireland’s EU membership ensures treaty access for international expansion.
New Zealand
New Zealand’s Game Development Sector Rebate provides a 20% rebate, capped at NZ$3 million per studio annually. In 2025, 40 studios shared NZ$22.44 million in relief. While the rate is modest, the programme’s reliability and the government’s commitment to supporting local IP development offer a stable foundation for long-term growth.
Tier 3: Jurisdictions Focused on Long-Term Tax Efficiency
Cyprus
Cyprus offers one of the most favourable regimes for IP income extraction. Its IP Box framework enables an effective tax rate of 2.5% on qualifying IP income, supported by an 80% deduction on IP profits. Combined with a full exemption on capital gains and amortisation periods of up to 20 years, the regime presents strong long-term value for studios managing valuable IP portfolios.
Malta
Malta combines development-stage incentives with advantageous profit repatriation tools. An effective corporate tax rate of as low as 5% is achievable through investment tax credits and a refund mechanism, while a flat 15% tax rate for qualifying gaming professionals enhances Malta’s ability to attract global talent.
Singapore
Singapore supports early-stage development through targeted IMDA grants of up to $50,000 for prototypes, particularly those that reflect local culture. Although not offering a broad-based tax credit regime, its digital economy focus, strong IP protections and strategic location provide clear benefits for regional scaling.
Compliance Realities: Hidden Costs, Traps and Critical Timelines
Compliance obligations across jurisdictions differ not only in complexity but also in their potential to delay or derail access to incentives. For example, the UK and Ireland’s cultural tests require detailed advance planning and evidence, with failure to meet minimum criteria — such as the UK’s 16-point threshold — resulting in complete ineligibility.
Timing risks are equally significant. In Australia, the Digital Games Tax Offset (DGTO) must be claimed with the initial corporate tax return; no amendments are allowed post-submission, making precise coordination essential. This has already led to missed opportunities for several studios.
Transfer pricing rules and substance requirements present further challenges for companies with cross-border structures. The UK’s VGEC explicitly excludes connected party profits, while Cyprus’ IP Box regime mandates genuine R&D activity to meet OECD nexus standards.
In this environment, professional guidance is not optional—it is essential to ensure full compliance, maintain eligibility, and avoid unexpected tax exposures or regulatory scrutiny.
Best-Fit Jurisdictions Based on Studio Profile
Cash-Constrained Start-ups
Québec and Australia stand out for their generous and accessible liquidity support. Québec’s revised salary threshold now offers enhanced benefits for higher-compensated roles, while Australia’s inclusive eligibility framework accommodates a broad range of development models—particularly beneficial for early-stage studios seeking predictable cash inflows.
Growth-Stage Studios
The UK’s Video Games Expenditure Credit (VGEC) combines operational flexibility with a low minimum spend requirement, ideal for scaling teams. Ireland complements this with one of the world’s highest project caps and an efficient interim certification process—supporting both domestic development and international co-productions.
IP-Driven Companies
Cyprus and Malta provide structurally advantageous environments for studios focused on IP commercialisation. Cyprus offers a 2.5% effective tax rate on qualifying IP income, capital gains exemptions, and long amortisation periods, while Malta combines development support with favourable post-profit tax treatment through its credit and refund regime.
Firms Targeting Regional Expansion
Singapore offers targeted prototype grants and serves as a strategic hub for accessing the broader Asia-Pacific market. New Zealand, while modest in rate, provides a consistent and transparent incentive framework—making it an attractive platform for studios aiming to scale original IP with long-term global ambitions.
Jurisdiction Comparison Table: Rates, Requirements and Key Dates
REGIME | KEY POINTS | COMPANY ELIGIBILITY | GAME ELIGIBILITY | OPERATION OF RELIEF | CLAIMS | INTERACTION | KEY DATES |
Québec (Canada) | 30% total rate (23% refundable, 7% non- refundable in 2025) | Québec- incorporated, min 6 employees | AI integration required, interactive games | Refundable + non- refundable credit | Revenu Québec + CRA | Exclusion threshold $18,054 | Rates change annually |
UK (VGEC) | 34% credit (25.5% net), 10% min UK spend | UK base or SPV, min 10% UK spend | Must pass cultural test (16/31 points) | Payable credit, annual return | HMRC | PAYE cap, no R&D overlap | VGTR ends Mar 2027 |
Ireland | 32% credit, €25m cap per project | Irish entity, min €100k spend | Pass cultural test, commerc ial intent | Refundable, interim/final certification | Irish Revenue | Double-tax treaties, EU access | Since 2022 |
Australia | 30% federal + state rebates (up to 45% total) | Australian entity, min $500k spend | Original games, not gambling | Refundable offset, $20m cap | ATO + state offices | Must claim with primary return | Ongoing |
Malta | 5% effective CIT, investment tax credits | Malta- based, substance required | Interactive digital games | Investment credits, IP-Box for profits | Malta Enterpris e | EU compliance, 15% flat tax for professionals | Ongoing |
Cyprus | 2.5% IP box rate, 80% deduction | Cyprus- incorporate d, nexus compliance | IP creation/exploitation | Reduced income tax, full CG exemption | Cyprus tax return | 20-year amortization, treaty network | Ongoing |
New Zealand | 20% rebate, NZ$3m studio cap | NZ- registered, min $250k spend | Game developm ent only | Annual rebate, capped per studio | NZ On Air | $40m annual fund | Apr 2023 start |
France | 30% tax credit, €6m annual cap | Min €100k spend, EU/EEA base | Pass cultural test | Tax credit, annual filing | French tax authority | Exclusive of R&D credits | Ongoing |
Singapore | $50k prototype grants, targeted support | Singapore entity, cultural relevance | Singaporean narratives /culture | Direct grants, not tax credits | IMDA application | Focus on cultural promotion | Ongoing |
What’s Next: Strategic Choices in a Shifting Incentives Landscape
Game development is no longer bound by geography — but incentive regimes still are. As studios scale across borders, the challenge is no longer just finding generous tax credits, but building a strategy that aligns relief opportunities with creative, financial, and IP goals.
From our work across Moore Global’s international network, we see that the most effective studios:
- Integrate incentive strategy into their early-stage planning.
- Tailor IP structures to support future monetisation and exits.
- Use cross-jurisdictional optimisation to align cashflow and compliance.
- Adapt quickly as programmes evolve, without losing benefits.
“Whether you’re developing an indie title, scaling a mobile studio, or managing a global IP franchise, Moore can support you every step of the way. We work across all the jurisdictions covered in this analysis — and many more — to align incentive strategies with your commercial goals. Our local tax specialists and sector-focused advisers collaborate globally to deliver clear, practical advice where and when you need it.”
Leon Dutkiewicz, Global Tax Leader, MooreAcross markets and mandates, Moore serves as a trusted partner — helping studios align financial incentives with creative ambition and commercial strategy.