State aid: Commission approves €36 million Belgian scheme to support videogame production

The European Commission has approved, under EU State aid rules, a €36 million Belgian scheme to support videogame production. This so-called “tax shelter” scheme is aimed at encouraging projects that contribute to a varied cultural landscape and that enrich the European videogame sector. Under the scheme, the aid takes the form of a corporate tax reduction to producers of videogames. In order to qualify for aid under the scheme, videogame productions must ensure the cultural character of the games. The scheme will run until 31 December 2027. In April 2020, the Commission opened an in-depth investigation to assess whether the scheme is in line with EU State aid rules, as well as the rules on free movement of goods and services. In particular, the Commission had doubts whether the imposition of territorial spending conditions, making the aid amount dependent on the amounts spent in Belgium, could be justified. The Commission assessed the scheme under Article 107(3)(d) of the Treaty on the Functioning of the European Union, which enables Member States to grant aid to promote culture and heritage conservation. The Commission found that the removal of the territorial spending condition by Belgium, following the opening of the in-depth investigation, allows that all expenditure in the European Economic Area on goods and services related to videogames production can qualify for the tax shelter. In addition, the Commission found that the scheme is necessary and appropriate to facilitate the development of cultural videogames, thereby contributing to the promotion of culture. Finally, the Commission concluded that the measure is proportionate, i.e. limited to the minimum necessary, and will have a limited impact on competition and trade between Member States. On this basis, the Commission approved the scheme under EU State aid rules. The non-confidential version of the decision will be made available under case number SA.54817 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.