French General Tax Code
In forceI. - Video game creation companies subject to corporation tax or exempt pursuant to Articles 44 sexies, 44 sexies A, 44 octies A, 44 duodecies, 44 quindecies, 44 sexdecies and 44 septdecies may benefit from a tax credit in respect of the expenditure mentioned in IV that they incur with a view to creating approved video games.
The benefit of the tax credit is subject to compliance by video game creation companies with the social legislation in force.
II. - Any leisure software made available to the public on a physical medium or online incorporating elements of artistic and technological creation, offering one or more users a series of interactions based on a storyline or simulated situations and taking the form of animated images, with or without sound, is considered a video game.
III. - 1. - Video games qualifying for the tax credit must meet the following conditions:
1° Have a development cost greater than or equal to €100,000;
2° Be intended for actual marketing to the public;
3° Be produced mainly with the assistance of authors and creative collaborators who are either French nationals or nationals of another Member State of the European Union, or of another State party to the Agreement on the European Economic Area that has concluded an administrative assistance agreement with France with a view to combating tax fraud and evasion. Foreign nationals, other than the aforementioned European nationals, who are French residents are treated in the same way as French citizens;
4° Contribute to the development of French and European video game creation and to its diversity by distinguishing themselves in particular by the quality, originality or innovative nature of the concept and the level of artistic expenditure.
Compliance with the creation conditions set out in 3° and 4° is verified by means of a points scale, the content of which is set by decree.
2. - Video games containing pornographic sequences or sequences of extreme violence likely to cause serious harm to the physical, mental or moral development of users are not eligible for the tax credit. With the exception of those containing pornographic sequences or sequences of extreme violence, video games specifically intended for an adult audience and marketed as such are eligible for the tax credit provided that they make a particularly significant contribution to the development and diversity of French and European video game creation, as determined using the points scale mentioned in 4° of 1.
IV. - 1. - For the creation of a specific video game, the tax credit calculated in respect of each year is equal to 30% of the total amount of the following expenditure, corresponding to operations carried out in France, in another Member State of the European Union, or in another State party to the Agreement on the European Economic Area that has concluded an administrative assistance agreement with France to combat tax fraud and evasion, provided that they are included in the determination of taxable income:
1° Depreciation allowances for fixed assets created or acquired as new and allocated directly to the creation of the video game under the conditions set out in III. Depreciation allowances for buildings are not included in the basis for calculating the tax credit;
2° Remuneration paid to authors within the meaning of Article L. 113-1 of the French Intellectual Property Code having participated in the creation of the video game, pursuant to a contract for the transfer of exploitation rights, as well as the related social charges;
3° Staff costs relating to the company's employees assigned directly to the creation of the video game meeting the conditions set out in III and the salary costs of the technical and administrative staff involved, as well as the related social charges;
4° Other operating costs, for the portion allocated to the activity of creating the video game. These expenses include the purchase of materials, supplies and equipment, the rental of buildings, maintenance and repair costs relating to these buildings, travel and travelling expenses, technical documentation costs and postal and electronic communication costs;
5° Expenses incurred for the creation of a video game meeting the conditions set out in III entrusted to other companies or organisations. These expenses are included in the basis for calculating the tax credit up to a limit of €2 million per financial year.
2. - The expenses mentioned in 1 are eligible for the tax credit from the date of receipt by the Chairman of the Centre national du cinéma et de l'image animée of a request for provisional approval. This approval is issued after selection by a committee of experts responsible for verifying that the video game meets the conditions set out in III.
Only expenditure incurred in the thirty-six months prior to the date of issue of the definitive approval referred to in Article 220 X is eligible for the tax credit.
V. - Public subsidies received by companies in respect of operations qualifying for the tax credit are deducted from the bases for calculating this tax credit.
VI. - The tax credit for each company is capped at €6 million per financial year. Where the financial year is less than or greater than twelve months, the amount of the ceiling is reduced or increased in the same proportions as the duration of the financial year.
VII. - The conditions for the application of this article, in particular those relating to the issue of provisional authorisation and the reporting obligations incumbent on companies, shall be laid down by decree.
