After months of deliberation, the European Commission has today green lit the UK Government's plans for Games Tax Relief, claiming the move is "in line with EU state aid rules."

In a statement released confirming the decision, the EC states that the "measure provides incentives to developers to produce games meeting certain cultural criteria, in line with EU objectives."

Taxing decision

The EC opened its investigation into whether Games Tax Relief was necessary back in April 2013, claiming that there "seemed to be no obvious market failure in this dynamic and growing sector", nothing that "games were being produced even without state aid."

However, the EC states that following an "in-depth analysis" and amendments proposed by the UK, Joaquín Almunia - the EC's VP in charge of competition policy – has concluded that those initial doubts "have been dispelled".

"The proposed aid for video games is indeed focusing on a small number of distinctive, culturally British games which have increasing difficulties to find private financing," concluced Almunia.

The EC acknowledges that Games Tax Relief will "provide an incentive to video game developers to produce games meeting certain cultural criteria", which the Government and trade association UKIE have already taken steps to lay out.

"The UK demonstrated in particular that the proposed cultural test ensures that the aid supports only games that are of cultural value," the EC's statement concludes.

"Only around 25 percent of UK produced games would be eligible for aid. Without this support the number of new culturally British games is likely to decline considerably."

More details on the roll out of Games Tax Relief are expected to be announced at a UKIE event hosted at BAFTA next week.

[source: EC]