Our global Media, Sport & Entertainment Hub provides insights into various legal and commercial issues impacting on this space.
As part of our “HUB FOCUS” series, we provide an extract, focusing on the main tax incentives and subsidies available for video game production in France.
“The National Centre of Cinematography and the Moving Image (Centre National de la Cinématographie et de l’image animée) (CNC) must approve all applications for tax relief.
Video game tax credit
Tax credit is available for video games if all of the following conditions are satisfied:
- The cost of development to be marketed to the public amounts to at least EUR 100,000;
- Effective marketing;
- The authors and creators of the video game are French, French residents, have the nationality of another EU member state, or have the nationality of an European Economic Space member state which entered into a tax treaty with France;
- The video game fosters the French and European video games creation industry and contributes to its diversity. In this respect, quality, originality and/or innovative character of the video game are notably taken into account; and
- The video game does not contain pornographic or extremely violent sequences. Videogames aimed at an adult audience, which do not contain pornographic or extremely violent sequences, are however eligible for tax credit as long as they significantly foster the French and European video games creation industry and contribute to its diversity.
The expenses eligible for tax credit must relate directly to the development of the video game in France or in the EU and include, for example, the author’s remuneration, functioning expenses and payroll expenses for selected administrative and technical personnel.
Before the game is created, the CNC must issue a provisional approval attesting that the game complies with these requirements. The final approval is issued once the video game is completed.
Video game aids funds (Fonds d’aide au jeu video) (FAJV)
The Ministry of Economy and the CNC co-finance the FAJV. Its objectives are to support research and development, innovation and creation in the video game sector through aiding the creation of IP, the pre-production of video games, and the creation of promotional events.
- Pre-production subsidies: this fund provides financial support for the pre-production phase, from the research to the experimental development of the prototype. The amount of the grant awarded is limited to 35% of the pre-production costs. The beneficiary has 12 months to elaborate on the prototype starting from the date of signature of the convention with the CNC.
- IP creation subsidies: set in 2010, this initiative aims to foster innovation and to promote IP rights. The subsidy is limited to 50% of the global cost and cannot exceed EUR 200,000. The beneficiary has 24 months to elaborate on the video game starting from the date of signature of the convention with the CNC. A single project cannot cumulate the IP creation subsidies and the pre-production subsidies.
- Promotional events subsidies: this fund provides financial support to the organisation of promotional events dedicated to the development of the video games market. The subsidy is limited to 50% of the global cost.
Network on Audiovisual and Multimedia Research and Innovation (Réseau Recherche et Innovation en Audiovisuel et Multimedia) (RIAM)
The CNC joined with Bpifrance (a public company supporting innovation and the growth of small business) and formed the RIAM. The RIAM’s objectives are to support projects carried out by small businesses, alone or in collaboration with other small businesses. The RIAM does not support the production, creation, or distribution of the works or the contents, but instead focuses on the development of innovative tools, services or technologies in connection with audiovisual and cinematographic multimedia.
Projects can be submitted at any time and the committee meets regularly to decide which projects are eligible for subsidies and/or a refundable advance.”