The Australian Digital Games Tax Offset passes the senate

The DGTO has passed parliament, with tax incentives now implemented for video game companies.
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The Australian Government has officially passed the Digital Games Tax Offset (DGTO) legislation, that allows for new tax incentives for Australia’s video game industry, through the senate.

With the law now closer to being entrenched, game developers in the country are looking to a future where projects with budgets over AU $500,000 will be granted a 30% tax incentive, as an encouragement to continue development within the country.

There are high hopes this legislation will attract international video game development studios into Australia, and aid in the growth of the local industry.

‘Today is a momentous occasion for Australian games creators, who have an extraordinary reputation internationally,’ Ron Curry, CEO of the Interactive Games and Entertainment Association (IGEA) said of the development in a press release. ‘These developers can now confidently proceed, expand and scale their businesses to deliver in-demand game content to a global audience and are well positioned to drive the knowledge economy.’

‘Recognition and support for our sector has been a long time coming and we cannot express how grateful we are to the Albanese Labor government for pushing the DGTO legislation through, to the Opposition for their bipartisan support for a policy proposal that had its genesis under the previous government, and to the Senate for passing it today.’

The legislation is currently subject to slight amendment, which will mean it needs to travel back to the lower house before it’s finally approved – but today’s announcement is still a positive step in the right direction.

The fight for the Digital Games Tax Offset

Read: Australian Government to officially enact Digital Game Tax Offset

Australian games representatives, including IGEA, have spent the last several years lobbying for fundamental changes to the industry, in an effort to support local studios and the potential launch of multinational studios in the country.

Given Australians spent AU $4.21 billion on video games in 2022 alone, and this figure continues to grow each year as gaming becomes increasingly popular as a form of entertainment, incentivising business to foster development in the country is an important next step in growing the industry, and leveraging global trends.

The tax offset will complement other federal incentives like the Games: Expansion Pack fund from Screen Australia, which seeks to support smaller-scale projects.

‘Making games has the ability to engage artists and technical specialists across the industry,’ Curry said. ‘We are excited for the career opportunities that growth in game development will bring to Australian creators.’

The Digital Games Tax Offset will have a retrospective impact on taxes from 1 July 2022 onwards, once it passes the final hurdle to become Australian law.

Update 2:06 pm AEST 21/06/23 – This article has been updated with new information about the DGTO and its progress through Australian Government approval. The article was originally published at 11:08 am on 21/06/23

Leah J. Williams is a gaming and entertainment journalist who's spent years writing about the games industry, her love for The Sims 2 on Nintendo DS and every piece of weird history she knows. You can find her tweeting @legenette most days.