Digital Games Tax Offset

Companies investing in game development will receive a 30% refundable tax offset on eligible qualifying expenditure
Expenditure includes salaries for Australian based game developers

The Digital Games Tax Offset (DGTO) is a 30% refundable tax offset for eligible businesses that spend a minimum of $500,000 on qualifying Australian development expenditure (QADE) related to the development of eligible games. As part of the Government’s “Digital Economy Strategy”, the DGTO aims to strengthen the digital games industry, expand employment opportunities for digital and creative talent, enhance the industry’s international competitiveness, and make Australia an attractive place for international investment.

Key Requirements

The Digital Games Tax Offset (DGTO) offers a 30% refundable tax offset for qualifying Australian development expenditure (QADE) from 1 July 2022 for eligible game developers.

The offset is available for the completion, ongoing development, or porting of digital games, subject to eligibility criteria, including certification by the Arts Minister and at least $500,000 of qualifying expenditure. The three distinct types of certificates are:

Completion Certificate: This certificate is awarded for a digital game that has been completed in the income year for which the offset is claimed. Costs may be incurred across one or more income years.
Porting Certificate: This certificate is awarded for a digital game that has been ported in the income year for which the offset is claimed. Costs may be incurred across one or more income years.
Ongoing Development Certificate: This certificate is awarded for the ongoing development of one or more previously released digital games in the income year for which the offset is claimed.

The offset is capped at $20 million per company (or group of connected or affiliated companies) per income year, requiring approximately $66.7 million in eligible expenditure to reach this cap.

Applicants must have an an ABN and be either an Australian resident company or a foreign resident company with a permanent establishment in Australia.

What is eligible for funding?

To qualify for the DGTO, a company must apply for one of the certificates mentioned above for digital games that meet the eligibility criteria.

A digital game is an electronic game available over the internet that can generate a display on various screens and allows for interactive gameplay. The sequence of events in an interactive game is determined by the player’s decisions, inputs, and involvement, and their actions have a significant impact on the outcome. Digital games must be developed primarily for entertainment or educational purposes and be available to the general public.

However, some digital games are not eligible for the DGTO, including games that are gambling services or primarily consist of gambling practices, games that have been refused classification or contain elements likely to lead to refusal, games developed mainly for industrial, corporate, or institutional purposes, and games developed primarily to advertise or promote a product, entity, or service.

What companies are eligible for funding?

To qualify for the DGTO, a company must have an active Australian Business Number (ABN) and be either an Australian tax resident or a foreign tax resident with a permanent establishment in Australia.

The game development work must be undertaken through the permanent establishment in Australia.

Eligibility criteria must be met when QADE is incurred, when the company lodges its income tax return, and when the DGTO is due to be credited. If the applicant company fails to meet these requirements during any period of development, the relevant expenditure during that period will not be considered QADE.

Is this grant competitive or entitlement based?

Entitlement. Applications are assessed against eligibility criteria.

How can I increase my chances of winning this grant?

By engaging an accredited government grants consultant, such as Avant Group.

Competitive grants often require significant business case development and project analysis to support the application, this may include detailed presentations supporting the project’s merit, projected sales, cost-benefit analysis and more.

As part of your engagement with Avant Group, your account manager will assess the required documents and will provide the following as needed to support your grant submission.

Grant application writeup including a detailed presentation illustrating how the grant funding will contribute to your project, how the funding will contribute to the project’s budget, a project milestone plan, delivery timeline, impact on employment if applicable and a breakdown of the management and leadership team for the project

Industry analysis presentation
Competitor Analysis Presentation
Marketing and Sales Analysis Presentation
3-5 year Cashflow Forecast
3-5 year Balance Sheet Forecast
Cost-Benefit Analysis of Grant Funding
End-to-end grant application including information collating, analysis and application writing
CAPEX (Capital Expenditure) cost-benefit analysis
Stakeholder relations and Risk Mitigation Plans
Any other relevant forecasting that will support your application

How can I get help with my application? Or know if I’m likely to win funding?

Avant Group offers a no-obligation assessment of your eligibility for funding and will assess your likelihood of a successful grant application.

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