Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

The tax credit for digital games is a cultural relief. Therefore, in order to avail of the credit, a digital game development company must first apply to the Minister for Tourism, Culture, Arts, Sport, Gaeltacht and Media for a cultural certificate. As part of the certification process, the company will be required to complete an undertaking in respect of quality employment to qualify for the relief. This undertaking is similar to the requirement in place under the section 481 film tax credit. The undertaking commits applicants to comply with all relevant employment legislation. It is crucial that employee rights are upheld in all industries and the inclusion of this provision reinforces the importance of adhering to employment legislation in the digital gaming sector.

Should a digital game development company fail to adhere to a condition or obligation specified in the undertaking, the conditions of certification will not have been met, which means that any credit claimed pursuant to an interim or final certificate may be subject to recoupment by Revenue and an application for a final certificate may be refused. In relation to bogus self-employment, this is an issue that is relevant to all sectors and, as such, should be treated in that manner. I am advised that Revenue carries out a comprehensive programme of compliance operations each year across a broad range of economic sectors, including the digital game development industry. Many of the operations are carried out on a multi-agency basis, which can include officials from the Department of Social Protection, DSP, and the Workplace Relations Commission, WRC. The primary role of these joint investigation units is to detect non-compliance with tax and duty obligations, which includes non-operation of the PAYE system on foot of bogus self-employment.

Together with the DSP and the WRC, Revenue has updated the code of practice for determining employment status, which was published in July 2021. The code aims to be of benefit to employers, employees, independent contractors and legal, financial and HR professionals. It is also aimed at investigators, decision-makers and adjudicators in the DSP, Revenue, the WRC, their respective appeals bodies, and the courts. Its purpose is to provide a clear understanding of employment status, taking into account current labour market practices and developments in legislation and case law.

It is important to note that the monitoring of compliance with employment rights legislation is primarily a matter for the Department of Enterprise, Trade and Employment, through the WRC. While the importance of employment rights is reflected in the tax credit for digital games, the WRC remains the appropriate avenue to address non-compliance with employment rights legislation. I therefore do not propose to accept the amendment.

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