Tax Incentive for the Digital Gaming Industry in Malta

Malta has recently launched a new tax incentive scheme for the development of the digital gaming industry in Malta. The scheme will grant a 100% tax credit of the total subcontracted costs incurred during development of an eligible digital game, up to a maximum of €15,000. If the tax credit exceeds the tax charge, the balance may be carried forward to be set off against the tax charge in subsequent years of assessment up to year of assessment 2015. The scheme will be available until 31st December 2013.

The aim of the incentive, which is targeted at business sectors that commission digital games intended as a promotional, educational or functional tool, is the creation of new job opportunities and the increase in demand in this highly innovative industry. The digital game must be made available online and must be developed for at least one widely available electronic device. The game should additionally educate users about the company’s products or services.

This is the latest addition to a number of other incentives which have been recently introduced to support the gaming industry. These include:

  • Flat rate of 15% income tax on salaries received by highly qualified persons working in the gaming industry
  • The establishment of a fund to provide financing to digital gaming companies seeking to develop new projects
  • Tax credits relating to expenditure incurred in acquiring or developing assets including intangible assets
  • Financing available to new digital gaming start-ups and enterprises engaged in new markets, new technologies, novel products or services that demonstrate a potential for job creation and growth
  • Tax credit for research and development of digital gaming projects
  • Co-financing of wages of employees, leasing of equipment and amenities in the case of SMEs
  • Co-financing up to 50% of costs incurred for market development to encourage more digital gaming enterprises in their internalization efforts.

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