According to a report from investigative thinktank TaxWatch, the studio behind big name games such as Grand Theft Auto V has paid absolutely nothing in corporation tax at all over the last 10 years.
TaxWatch claims that Rockstar North, based in Edinburgh, Scotland, has also claimed £42 million in subsidies from the taxpayer over the last three years.
The studio received these tax credits as part of the Video Games Tax Relief regime, which was introduced by the UK government back in 2014. The regime provides support for games that are “culturally British.”
In order for games to fall under the “culturally British” label, they are scored against a variety of criteria, including setting, having lead characters who are British, or being produced in the UK.
The majority of the Grand Theft Auto series takes place outside of the UK, with Grand Theft Auto V taking place in the fictional setting of Los Santos. It can be assumed that the ‘being produced in the UK’ part of the criteria is what managed to push Rockstar North into the applicable bracket.
“Our analysis shows that the amount claimed by Rockstar North is the equivalent of 19% of the total relief paid to the entire video games industry in the UK since the programme came into effect.” TaxWatch states.
“Seven active companies based in the UK, using the Take-Two and Rockstar names, declared a total profit before tax of £47.3m in the UK between 2013 and 2018. However, over the same period we estimated the operating profit of games published by Rockstar to be in the region of $5bn.”
However, the end of the report emphasises that “there is no evidence that HMRC have challenged this set-up or that Take-Two or any of the individuals named in this report has acted illegally.”
You can read TaxWatch’s entire breakdown of Rockstar North and Take-Two, which includes helpful tables and charts, by following the link here.