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Germany to Introduce New Tax Incentives for the Gaming Industry
Germany is set to introduce new tax incentives specifically for the gaming industry, aiming to boost investment and competitiveness in the global market. The plan, which is expected to roll out soon, follows successful models from other countries such as France, Canada, and the UK.
The new incentives will allow game developers to claim certain costs and reduce their tax burden, with up to 25% of eligible costs being covered for larger companies and up to 35% for small and medium-sized enterprises (SMEs). This is part of a broader R&D tax credit scheme that Germany already offers.
In addition, direct government funding for gaming is set to increase significantly. Grants are set to rise from €88 million in 2025 to €125 million in 2026. The InvestBooster program, effective from July 2025 to December 2027, also offers accelerated depreciation and a phased corporate tax reduction to stimulate investment.
Comparatively, France offers the Crédit d’Impôt Jeu Vidéo (CIJV) scheme, which provides a tax credit of up to 30% of eligible production costs for video game developers. Canada provides various provincial tax credits for gaming and digital media, with schemes that can exceed 35% of eligible expenditures. The UK offers the Video Games Tax Relief (VGTR) program, which can provide up to 20% of qualifying expenditure back to game developers.
These international examples serve as the benchmark that Germany aims to meet or exceed with its new incentives, which are still being developed and are expected to be implemented soon after 2025. While Germany's incentive level may initially be more conservative, it is supplemented by substantial direct funding increases.
Currently, less than five percent of the money spent on games in Germany goes to games from Germany itself. However, with the new incentives, foreign developer studios and producers could come to Germany and create jobs, according to Nathanael Liminski.
The gaming industry is booming in the internet age, with visual possibilities improving thanks to new technology. Politicians from CDU/CSU, SPD, Greens, and federal states have signaled their support for relieving German developer companies of their tax burden, viewing it as a targeted investment in the future of the economic location Germany.
Green Bundestag MP Andrea Lübcke sees gaming as "one of the central innovation and growth industries of the 21st century". The federal government would have to compensate for corresponding losses in the tax revenue of the states, according to Bavaria's Digital Minister Fabian Mehring.
Successful games from Germany include "Enshrouded" by Keen Games and "Hunt Showdown" by Crytek, both studios from Frankfurt, as well as "Anno 1800" by Ubisoft from Mainz and Düsseldorf, a well-known classic game from Germany.
In summary, Germany's new tax incentives for the gaming industry are aimed at strengthening the sector and making it more competitive on the global stage. The incentives are expected to boost investment, create jobs, and help local game developers overcome their cost disadvantage of around 30%. The gaming industry is currently playing a minor role in the growing global market, but with the new incentives, this could change.
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