The Australian Government has recently enacted legislation to establish a digital games tax offset (DGTO).
The DGTO is a refundable tax offset which allows eligible Australian companies that develop digital games to claim 30% of their total qualifying Australian development expenditure (QADE):
- as certified by the Minister for the Arts
- incurred on or after 1 July 2022
- up to a cap of $20 million per company, per income year (this cap also extends to a group of companies that are connected or affiliated).
To be eligible to claim the DGTO you must:
- obtain a certificate from the Minister for the ArtsExternal Link stating your eligibility for the DGTO and total QADE
- claim the offset in your company tax return for the income year
- be an Australian resident company with an ABN, or a foreign resident company with an ABN and a permanent establishment in Australia.
Once you’ve obtained a certificate from the Minister for the Arts, you can claim the DGTO in your 2022–23 company tax return on the calculation statement at label E - Refundable tax offsets.