Simon Harris (Wicklow, Fine Gael)
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Question 170: To ask the Minister for Finance if he will enumerate and detail, in tabular form, the current taxation breaks and exemptions that apply to producers and designers of video games; his plans to extend these initiatives, introduce new initiatives and tax breaks; the timeframe he envisages tabling these proposals; their likely impact on the video games industry here; and if he will make a statement on the matter. [30582/12]

Michael Noonan (Limerick City, Fine Gael)
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Although there are no specific tax reliefs for video games producers, a broad range of tax reliefs are available for which video games producers could qualify. Some of these are detailed below.

The Employment and Investment Incentive (EII) is available to the majority of trades, including video game producers. Under this scheme, companies can raise up to €2.5 million per annum, subject to a lifetime limit of €10 million. Investors will receive an initial 30% relief on their investment, with the possibility of a further 11% relief at the end of the holding period where the company has increased employment or spent at least 30% of the funding raised on research and development.

The Special Assignee Relief Programme (SARP) is designed to reduce the cost to employers of assigning key individuals in their companies from abroad to take up positions in the Irish based operations of their employer. The programme provides for an exemption from income tax on 30% of salary between €75,000 and €500,000 for employees that are assigned for a minimum of 1 year. The exemption is available for a maximum of 5 years. The scheme has been introduced for an initial three-year period ending on 31 December 2014, in order to allow for review. Any assignee that avails of the scheme during this time will have access to the relief for the period of their assignment, up to the maximum 5 years.

A scheme was introduced in Budget 2009 which provides relief from corporation tax on the trading income and certain gains of new start-up companies in the first three years of trading, and was modified in 2011 so that the value of the relief will be linked to the amount of employers' PRSI paid by a company. Finance Bill 2012 extends this scheme for the next three years to include start-up companies which commence a new trade in 2012, 2013 or 2014.

Digital games are essentially software development and would already be a field of science and technology for the purposes of the R&D tax credit scheme. Relevant R&D expenditure on games should already qualify under the existing terms of the tax credit scheme, provided any specific games development achieves scientific or technological advancement and involve the resolution of scientific or technological uncertainty.

The first €100,000 of qualifying R&D expenditure benefits from the 25% R&D tax credit on a volume basis. The tax credit continues to apply to incremental R&D expenditure in excess of €100,000 as compared with such expenditure in the base year 2003. The outsourcing limits for sub-contracted R&D costs are the greater of 5 or 10% as appropriate or €100k. Companies in receipt of the R&D credit have the option to use a portion of the credit to reward key employees who have been involved in the development of R&D.