Digital Games Tax Offset Rules

Recently, the government has introduced a set of regulations called the “Income Tax Assessment (Digital Games Tax Offset) Rules 2023.” These regulations are in response to a new law that aims to provide financial support to developers involved in creating digital games by offering them a refundable tax offset.  The DGTO provides eligible game developers with a 30% refundable tax offset for qualifying Australian development expenditure from 1 July 2022.

The rules explain how developers can get certificates confirming their eligibility for this tax benefit. These certificates cover different stages of game development and are evaluated with the help of the DGTO Advisory Board. The Arts Minister’s approval is essential for these certificates.

These rules began on July 8, 2023, and eligibility criteria need to be met. This includes having at least $500,000 of qualifying expenses and following guidelines in Division 378 of the Income Tax Assessment Act 1997. 

The benefit is capped at $20 million per year per company or connected group, which requires approximately $66.7 million in eligible expenses. Eligible applicants include Australian resident companies with an ABN and foreign resident companies with a permanent establishment in Australia, also with an ABN.