Finance Minister Paschal Donohoe has announced further plans for a tax credit for the digital gaming sector in today's Budget.
Mr Donohoe said the sector has seen "exponential global growth" in the past decade, but added that employment growth in the sector in Ireland has not matched this global trend.
He said the new relief will support digital games development companies by providing a refundable corporation tax credit for expenditure incurred on the design, production and testing of a game.
The relief will be available at a rate of 32%, on eligible expenditure of up to a limit of €25m per project.
"There are also synergies with our established film and animation sectors that will support quality employment in creative and digital arts in Ireland," the Minister stated.
Commenting on today's development, Deloitte said the introduction of a digital gaming sector tax credit is the next step in the country's journey towards an innovative and knowledge-based economy.
Caroline O'Driscoll, Tax Partner, Deloitte, said the global gaming industry is estimated to be worth over €100 billion, with the Minister acknowledging that employment in this sector in Ireland has not matched global trends.
She said past experience has shown from the Research and Development tax credit and film tax relief show how valuable such targeted measures can be.
The chief executive of Animation Ireland, Ronan McCabe, welcomed today's announcement of the 32% tax credit for digital gaming projects.
Mr McCabe said the gaming industry has enormous potential to bring thousands of highly skilled jobs to Ireland.
"Many of our members are involved in gaming projects and we acknowledge the government's engagement in this area to bring new jobs and investment to Ireland," he added
Innovation Equity Fund gets more money
The Finance Minister also said the Government intends to commit another €30m investment to the Innovation Equity Fund through Enterprise Ireland.
Mr Donohoe said this will be matched by €30m from the European Equity Investment Fund, subject to Board approval.
The fund has a mandate to invest in domestic, high innovation enterprises.
The Minister said the the Ireland Strategic Investment Fund expects to participate with its €30m as a co-investor, leading to potential investments of up to €90m for predominantly seed stage Irish SMEs.
The fund is expected to be launched in early 2022 and will increase the availability of early stage funding for Irish SMEs.
Mr Donohoe said it will also be consistent with other priorities such as promoting regional development, supporting female entrepreneurship, and climate change initiatives.
An extension of the Section 486C corporation tax relief for certain start-up companies was also extended until the end of 2026 in today's Budget.
The Minister said that data shows that this relief continues to support employment and businesses in a cost-efficient manner.
"In view of the challenges companies currently face in utilising the relief, start-up companies will now be able to avail of the relief for up to five years, in place of the current three years," he added.