The introduction of Australia’s Digital Games Tax Offset is imminent

The long awaited Tax equalization for digital games (DGTO), the a 30% tax refund for game development projects that reach a spending threshold of A$500,000has finally been tabled in Parliament and is about to be implemented.

In November 2022, the Australian government passed this Treasury Laws Amendment (Measure No. 4 of 2022) Bill 2022 in the House of Representatives and thus finally brought the DGTO into force.

The DGTO was originally scheduled to come into force on July 1, 2022, having been announced in mid-2021 under the then Liberal-National coalition government. With general elections in May 2022 leading to a change of government, the status of the bill was unknown for a while until the new Labor government finally confirmed its support for the digital games tax equalization in October 2022.

In a statement, Ron Curry, CEO of Australian industry association IGEA, said: “By supporting and introducing legislation into Parliament, the Albanian government has given our highly creative and tech-savvy industry reassurance and opportunity for growth.”

“The Australian game development sector has seized this opportunity. Job creation, revenue growth and international investment in games development will continue to solidify and enhance Australia’s reputation for providing quality content internationally. In particular, it will create a new generation of creative 21St Century Australian Tech Workers.’

“The DGTO, coupled with the many state digital game funds and rebates, means Australia has some of the most aggressive incentives for the video game industry in the world. We expect many multinational companies to expand their operations to Australia and contribute to a thriving and sustainable game development ecosystem.’

The introduction of the digital games tax equalization follows the Australian Government’s digital games support program called Games: Expansion Pack, which was implemented by Screen Australia in March 2022.

The Games: Expansion Pack fund supports small to medium-sized games projects with budgets under AU$500,000, while the Digital Games Tax Offset benefits larger studios working on more ambitious projects above that threshold.

The Games: Expansion Pack program has already funded AU$4 million worth of local games projects and a new round of funding is now open.

Read: Victoria’s gaming industry continues to thrive and other states need to take notice

These two federal schemes, along with several pre-existing games funding initiatives and tax equalization initiatives by government creative agencies across the country, will hopefully pave the way for some exciting developments across the spectrum of Australia’s games industry in the years to come.

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