IGEA Educates Webinar – Preparing for the DGTO and End of Financial Year Considerations
Please join IGEA and a panel of our expert members as they present the Digital Games Tax Offset (DGTO) and associated opportunities, along with end of financial year requirements and budgeting considerations for local games businesses. There will be plenty of time for Q and A.
Our panellists are:
Below are questions that were answered in the Q&A Chat during the webinar:
What is a QADE cost?
Primarily the payroll/labour cost of developing the game. The majority of other expenses are not included (most business running costs like rent, utilities, software, etc)
Can we apply for the DGTO on top of other rebates received from screen NSW, QLD, etc?
You can but you are meant to exclude expenditure relating to the grant on your DGTO application. So you want to make them covering different things like Ben said – you want the grant to cover non-QADE activities therefore there is no overlap.
Is the offset available for a project that doesn’t actually make it to market in any way? Or is the expectation to instead cover that by the R&D offset?
The game has to be released and available for sale.
The slides said we can’t claim DGTO on expenditure related to other grants… does this include the NSW Digital Games Rebate and other state equivalents?
We will need to see what the Department have to say on this one but I would expect this would be similar to other grants where you would want to ‘allocate or acquit’ these funds against non-QADE costs.
I don’t recall in any of the consultation that state or federal grant funding was not able to be included in the budgeted expenditure? Is this something that was introduced to the legislation?
This looks to have been introduced in the second version of the legislation – under 1.93 in the EM.
Question related to contractors.
What about outsourcing to other Australian based studios? For example, if we outsource our 3d art asset creation to an Australian 3d art studio, is that eligible expenditure?
Yes, this would be a QADE expense. As long as that studio then paid an individual directly and not to another contractor or entity.
Do I have to wait for DGTO to become law (ie approved by the lower house), before I make an existing claim?
Once the legislation is assented the earliest you can make a claim will be as soon as the Department release their applications. If the game was completed prior to 30th June 2023 this would allow your first Offset to be for the 2023 financial year.
Is there any prediction for how long the DGTO scheme will be in place for? Are there any minimum commitments in place already?
Its legislation so it will go on indefinitely unless the legislation gets repealed.
The level up IGEA guide and other comments in the community seemed to indicate that the state based video game rebates are uplifts on the DGTO? eg. $1 of eligible DGTO expenditure can also be claimed under the state rebate but NOT the R&D for eg
The rebates will still be available yes, it is just other tax offsets such as R&D that are not compatible with the DGTO. State based rebates/grants are not a federal offset for DGTO purposes.
Just following up on the question re: not been able to claim on any of the grant finance in a project. This just doens’t make sense. You can’t ‘allocate’ different sources of finance to particular line items in a budget. It goes into a ‘pool’ that is the budget. Can anyone site which bit of the legislation says specifically that grant and/or rebate finance is not eligible. This is not the case for film/TV PDV or Producer Offset rebates. So why games?
QADE excludes: “expenditure funded directly or indirectly by:
(i) a Commonwealth grant or subsidy to which Australian businesses are generally eligible; or
(ii) a State or Territory grant or subsidy to which Australian business in that State or Territory are generally eligible”.
There was some confusion around claiming DGTO and State based rebates. A representative from Office For The Arts joined the webinar and offered the following information:
Hi all – Penny Sherburn from Office for the Arts, responsible for administering the DGTO in Government. I just wanted to clarify the relationship between grant funding and the DGTO. Apologies that this is not clear in the legislation and supporting materials, and I hope this clarifies confusion. Please feel free to get in touch if you need any further details – I’m available via email – email@example.com
Expenditure related to a grant or subsidy provided by the Australian Government or a state or territory government that is specifically designed for the digital games industry can be development expenditure and can be QADE provided that the expenditure is eligible.
However, expenditure related to a grant or subsidy provided by the Australian Government or a State or Territory government that is generally available to business – such as an apprentice program or an emergency stimulus payment – is excluded from development expenditure and is not QADE. This would be a support package like Jobkeeper.