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ATO Notes Pending Legislation for Digital Games Tax Offset — Orbitax Tax News & Alerts

On 7 March 2023, the Australian Taxation Office (ATO) issued a release on pending legislation for the digital games tax offset that was first announced as part of the Budget 2021-22.


Digital Games Tax Offset

The Australian Government has introduced legislation to establish a Digital Games Tax Offset.

On 23 November 2022, the government introduced legislation to establish a Digital Games Tax Offset (DGTO). The legislation forms part of the Treasury Laws Amendment (2022 Measures No. 4) Bill 2022.

The DGTO provides eligible game developers with a 30% refundable tax offset for qualifying Australian development expenditure from 1 July 2022.

It will be available for completion, ongoing development, or porting of digital games, subject to:

  • eligibility criteria set out in Division 378 of the Income Tax Assessment Act 1997, including certification by the Arts Minister
  • at least $500,000 of qualifying expenditure.

The offset is capped at $20 million per company (or group of companies that are connected or affiliated) per income year. Reaching this cap would require approximately $66.7 million in eligible expenditure.

Applicants must be companies that are either:

  • Australian tax residents, or
  • foreign tax residents with a permanent establishment in Australia.

For more information, see: