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European Commission Opens State Aid Investigation into the Belgian Aid Scheme to Support Videogame Production — Orbitax Tax News & Alerts

The European Commission has announced its 30 April 2020 decision to open a State aid investigation into Belgium's aid scheme to support videogame production.


State aid: Commission opens in-depth investigation into Belgian aid scheme to support videogame production

The Commission has opened an in-depth investigation to assess whether a Belgian aid scheme to support videogame production is in line with EU State aid rules. In 2014, the Commission approved a Belgian "tax shelter" scheme to support film production. Under the existing scheme, undertakings which are taxable in Belgium and invest in film production are entitled to a tax advantage, subject to certain territorial spending conditions.

Belgium has decided to extend the support provided under the existing scheme on funding of film production to also apply to funding of videogame production. By extending the scheme, Belgium intends to apply the same conditions to videogame production, including the territorial spending conditions.

However, the imposition of territorial spending conditions is exceptionally allowed under the Commission Communication on State aid for films and other audiovisual works due to the specificities of film production, which is by nature very mobile. Furthermore, the Communication recognises a need to maintain a critical mass of infrastructure for film production in each Member State. This exception has to be interpreted narrowly.

At this stage, the Commission has doubts that the application of such an exception can be justified with respect to videogames. The opening of an in-depth investigation gives Belgium and interested third parties the opportunity to submit comments. It does not prejudge the outcome of the investigation.

More information will be available on the Commission's competition website, in the State aid Register under case number SA.54817.