Tax Shelter now open to video games

Created in 2004 at the will of the legislator with the aim of galvanising Belgium’s audiovisual sector, the fiscal incentive scheme known as the “Tax Shelter” has continued to attract imitators ever since.

Created in 2004 at the will of the legislator with the aim of galvanising Belgium’s audiovisual sector, the fiscal incentive scheme known as the “Tax Shelter” has continued to attract imitators ever since. After being extended in 2017 to include the “performing arts”, it has now undergone a further expansion, this time for the benefit of the video game sector. Having remained in limbo for a while1, the proposal was finalised in March 2019 following a near-unanimous vote by the Chamber. Here’s the full story.

 Will the Tax Shelter be extended to video games? Two regions have called for this, La Libre Belgique 21/08/2018; The Video Games Tax Shelter overcomes first hurdle, Le Soir 06/02/2019; Chamber approves extension of Tax Shelter, L’Echo 21/03/2019.

Belgium still playing catch-up?

The gaming sector is generating ever-increasing revenues: 108.9 billion dollars in 2017 compared with just over 100 billion dollars the previous year. But this striking global balance sheet is belied by the domestic picture, as the 72 Belgian firms active in game development still struggle to fund their projects and to secure support in such a booming sector. Our country’s own results stand at 43.6 million euros, with around forty games produced annually. The industry’s requirements in terms of staff qualifications are very demanding and more than a third of our talents move abroad. Moreover, with a game’s production cycle being very long, the number of projects taking place at any one time is by definition quite limited. “Protecting” projects “in their most vulnerable phase”2, just as for cinema films and stage works, is therefore an integral part of the logic behind the Tax Shelter’s initial proposal for video games. For the signatories, the aim is very much to replicate the success of the audiovisual Tax Shelter3, complete with the associated economic benefits.

While the idea of support for the sector is nothing new (it has been a key element of the most innovative educational and cultural proposals), the decision has been a long time coming.


 2 Draft Resolution of 30 May 2016 concerning the Tax Shelter’s extension to the video game industry.
 3 Proposed Law of 30 January 2019 amending the 1992 Income Tax Code with a view to extending the Tax Shelter to the video game sector.

The Tax Shelter’s rollout.

The political and sectoral discussions reflected the potential impact of a new expansion upon the industries already covered by the Tax Shelter. The combined effect of the Tax Shift and of the inclusion of the performing arts has already had the effect of placing the system under pressure, leading to fears of the historic cinema sector being undermined. What with the loss of attractiveness for the investor on the one hand and the drainage of sums invested on the other, the 2018 fund-raising balance sheet showed some signs of a slowdown. We have devoted an article to the corrective measures adopted, which have in the meantime led to the adaptation of articles 194ter and following (law of 28 April 2019).

Where video games are concerned, the 356% or 421% exemption will be “limited to an amount equal to 50% of the taxable profit reserves for the period, capped at €850,000 for the tax years 2019 and 2020 and at €1,000,000 from the 2021 tax year”. The “sum of all tax values from Tax Shelter declarations within the video game framework” will therefore not be able to exceed 2,500,000 euros.

The application of the law of 29 March 2019 (which adds to the 1992 Income Tax Code an article 194ter/3 concerning video games) will not however be immediate, as the authorities will need to notify the European Commission of the measure and obtain that body’s approval. It will also be necessary to await a cooperation agreement between the Federal and Community governments, which possess the authority in terms of the recognition of works / games on the TS and performing arts models.


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