Following a report published by UK think tank Tax Watch, publisher Rockstar North has come under fire due to its high tax rebate. According to their finances for the last fiscal year, the studio reportedly claimed £37.6 million under the Video Games Tax Relief (VGTR) program. This absurdly high figure led many to believe that the developer was unethically abusing the tax relief program. Responding to the allegations, Rockstar released a statement, saying that the VGTR supports “nearly a third of [the UK’s] entire development workforce”.
“The UK’s program to support the growth of a broad range of creative industries through tax relief is a proven success,” a Rockstar rep tells VG247. “The program has directly resulted in Rockstar Games significantly increasing its investment in the UK, creating well over 1,000 highly skilled and long term jobs across London, Lincoln, Yorkshire and Scotland.”
The report which initially sparked the controversy notes that despite Rockstar earning more than $6 billion from the Grand Theft Auto series, the studio skipped out on paying the UK Corporation Tax for the fourth year in a row. Furthermore, out of the 345 VGTR claims made last year, Rockstar’s claims accounted for over 37% of them.
“This investment and the success of British video games supported by the program not only significantly contributes to the economy, and to UK tax receipts, but also helps solidify the UK’s position at the forefront of video game development well into the future.”
The Video Games Tax Relief program was established in the UK in 2014. Since then, 1110 tax relief claims have been made on the basis of the program, of which approximately 25% were submitted by Rockstar. In total, the studio has earned a total of £80 million in tax returns since the launch of VGTR.
Rockstar, however, defends this claim, saying that the VGTR “delivers a great return on investment for the taxpayer. For every £1 invested into the games industry via VGTR, it pays back £4 in gross value add into the economy.”
Speculation suggests that the tax returns are going towards the development of Grand Theft Auto 6, though Rockstar is yet to officially comment on that.