Boosting Australia’s Game Development Industry: Digital Games Tax Offset

The Digital Games Tax Offset (DGTO) gives eligible game developers a 30% refundable tax offset on qualifying Australian development expenditure. It applies to expenditure from 1 July 2022, and the law establishing it received royal assent on 23 June 2023 as Division 378 of the Income Tax Assessment Act 1997.

What does the DGTO mean for game developers in Australia?

The DGTO offers a valuable opportunity to receive financial support for the completion, ongoing development, or porting of digital games. First of all, applicants must meet certain eligibility criteria. This includes certification by the Arts Minister and a minimum expenditure of $500,000 on qualifying activities. Applicants must be either Australian tax residents or foreign tax residents with a permanent establishment in Australia.

This offset is capped at $20 million per company or group of connected or affiliated companies per income year. Reaching this cap would require approximately $66.7 million in eligible expenditure, which showcases the potential impact and scale of this support for the industry.

Read more on the ATO’s digital games tax offset page.

Consult a Chartered Tax Adviser about the Digital Games Tax Offset

If you are a game developer or part of a game development company, you should stay updated about the eligibility criteria and application for the DGTO. It also sits alongside the R&D Tax Incentive and the other government grants and incentives a studio may be eligible for – they are assessed separately, and expenditure claimed under one cannot be claimed under another. However, to maximise benefits of the Digital Games Tax Offset, we recommend you seeking professional advice from a tax advisor. Book your appointment with BTMH.