On Thursday 6.5.21, the Government announced that it will provide a 30% Digital Games Tax Offset as part of its $1.2b Digital Economy Strategy to be unveiled in the 2021-22 Federal Budget. Details are available on the Government’s Digital Economy website.
See below for further details.
Digital Games Tax Offset
The Treasurer said tax incentives will be provided to stimulate investment in digital technologies, including a 30% Digital Games Tax Offset for eligible businesses that spend a minimum of $500,000 on qualifying Australian games expenditure. Consultation with industry in mid-2021 will inform the criteria and definition of qualifying expenditure to support the development of digital games. Games with gambling elements, or that cannot obtain a classification rating, will not be eligible.
DATE OF EFFECT: The Digital Games Tax Offset will be available from 1 July 2022 to Australian resident companies or foreign resident companies with a permanent establishment in Australia.
Self-assess ‘effective life’ of intangibles
The Government will also amend the income tax law to allow taxpayers to self-assess the effective life of certain intangible assets (such as intellectual property and in-house software), rather than being required to use the effective life currently prescribed by statute. This amendment will apply to patents, registered designs, copyrights and in-house software for tax purposes. Taxpayers will be able to bring deductions forward if they self-assess the assets as having a shorter effective life to the statutory life.
DATE OF EFFECT: The self-assessment of effective lives will apply to eligible assets acquired following the completion of temporary full expensing (introduced in the 2020-21 Budget).
Venture Capital review
The Government said it will also undertake an assessment review of the venture capital tax concession programs to ensure they are achieving their intended objectives. Public consultation will be undertaken in 2021.
Other Digital Economy Strategy items
The Minister for the Digital Economy, Senator Jane Hume, said the broader Digital Economy Strategy will provide over $100m to support digital skills, including a new pilot program for work-based digital cadetships. The Government will also invest $200m to overhaul myGov, to make it easier for people to find the services they need, as well as $302m to enhance the My Health Record and an expansion of the digital identity system.
[11.5.21; LTN 85, 6/5/21]