The Government has launched a new tax credit for the digital games sector.

The relief will take the form of a refundable corporation tax credit available to digital games development companies for qualifying expenditure incurred on the design, production and testing of a digital game.

It will be available at a rate of 32% of eligible expenditure up to a maximum limit of €25m per project. There will also be a per project minimum spend requirement of €100,000.

It is estimated that Ireland's digital gaming sector could be worth around €240m, but games developed in Ireland account for a tiny portion of this figure.

Approximately €1.2m was estimated to be attributable to Irish games in 2016.

The new tax credit was launched by the Minister for Finance Paschal Donohoe and the Minister for Tourism, Culture, Arts, Gaeltacht, Sports and Media Catherine Martin.

The ministers formally signed the regulations giving effect to the legislation during a visit to digital gaming company 'Black Shamrock' in the Guinness Enterprise Centre in Dublin.

"Ireland is already a world leader in other areas of the audiovisual sector including film, television and animation production, I believe that this credit will be instrumental in replicating such successes in the digital gaming sector," Mr Donohoe said.

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Ms Martin said the new tax credit will lead to support for the development of indigenous games companies, along with increased investment from overseas games companies looking to locate in Ireland.

"Today is an important day for the expanding Irish games industry and this scheme will help to create jobs in the creative and digital arts in Ireland," Ms Martin said.

Craig Stephens of Imirt, the Irish video games industry association, said that Ireland is ideally positioned to secure more of a rapidly expanding sector which is believed to be worth around $300 billion worldwide.

"This globally significant 32% credit will support our existing games development talent, plus attract major investment from overseas," Mr Stephens said.