[PIGMI] Activision Blizzard lobbying for new R&D tax changes

[Anthony Sweet]

> > I can't imagine why they'd bother unless they thought Canda was  
> drying up?


The proposed credit scheme by the Australian senate is somewhat more  
generous than the Canadian R&D credit scheme. Given then that the AUD  
is almost equal to CAD, it comes down to where can they can get the  
better tax credit bang for buck.


Australia: Completely refundable 45% tax credit for companies with  
turn-over less than $20 million. Not aware of any talk about the  
expenditure cap (if it would exist). Based on provided information,  
this means for a tax credit tested against very generous turn-over  
threshold with an unlimited expenditure cap. (Sounds too good to be  
true? Can theoretically mean an Australian company with minimal turn- 
over could claim $100mil on R&D expenditure and walk away with ~$10mil  
cash in hand. Definitely facts missing from this article - I haven't  
researched any further though.)

No mention in the article on whether this applies to foreign-owned  
companies, but that doesn't matter if US studios are looking for work- 
for-hire contracts with R&D enabled studios.

Canada: Non-refundable 20% tax credit against R&D expenditure directly  
for foreign companies; Canadian companies receive 35% for first $3mil  
in expenditure, 20% thereafter. Companies using the 20% threshold  
experience no expenditure cap.  No turnover testing, but the credits  
aren't refundable  for foreign companies (don't get cash back if tax  
credits exceed tax debt, they can only be used to lower your tax debt).


To my figuring, the percentages doesn't work out as cleanly as the  
Canadian scheme (45% of 30% income tax vs. 20% of direct expediture),  
but the high turn-over limit partnered with a full credit refund could  
be lucrative for US companies looking to engage low sales/high expense  
R&D machines.


It sounds highly speculative to my limited knowledge of the subject,  
but definitely optimistic at least to have this topic coming up again  
in our parliament. Nice to see some silver lining!


-- 
Anthony Sweet - RocketHands Pty Ltd

w: www.rockethands.com
e: anthony at rockethands.com








On 08/03/2011, at 12:31 PM, Eva Tudori wrote:

> Thats really interesting! In answer to your question Wez, I think  
> WoW wasn't mentioned as Activision developed Call of Duty and the  
> Guitar hero games before their merger with Blizzard in 2007.  
> Activision and Blizzard still exist as different entities and  
> Activision doesn't have anything to do with WoW development.
>
> Anyway, fingers crossed this comes about!
>
> On Tue, Mar 8, 2011 at 9:44 AM, Wesley Lamont <pigmi at raez.net> wrote:
> Very interesting. I'm suprised they are even looking at us with the  
> Aussie Dollar so high. There must be something else I'm missing or  
> what they are requesting is going to be more viable than Canada/US  
> development though you would think they would be asking those  
> governments for a similar agreement.
>
> I'm amusing  that Activision/Blizzard makes no mention of Warcraft  
> in it's list of well known games.
>
> WEZ!
> On 08/03/2011, at 9:32 AM, Jetha Chan wrote:
>
> > My bad - didn't realise it was behind a login on the website.
> >
> > Try http://puu.sh/19qg for page 1 and http://puu.sh/19qh for page  
> 2 - would've given in PDF but didn't want to embed licensing  
> information.
> >
> > Jetha
> >
> > On 8 March 2011 09:09, Chris Kruger <chris.kruger at gmail.com> wrote:
> > I can't imagine why they'd bother unless they thought Canda was  
> drying up?
> >
> > On Tue, Mar 8, 2011 at 8:44 AM, Nick Lowe <nick at onetwenty.org>  
> wrote:
> > > Interesting!
> > >
> > > Um... does anyone have a link that's not behind a login?
> > >
> > > - Nick
> > >
> > > On Tue, 2011-03-08 at 08:37 +0800, Jetha Chan wrote:
> > >> Anyone see this in the AFR today?
> > >>  http://afr.com/p/business/technology/game_on_for_players_XJBsCXCaZSecRh5atAWs3O
> > >>
> > >>
> > >> "The world’s biggest game studio, Activision Blizzard, which  
> makes
> > >> some of the industry’s best-known games, including Guitar Hero  
> and
> > >> Call of Duty, says it will invest tens of millions of dollars in
> > >> Australia in coming years.
> > >>
> > >>
> > >> But there’s a catch. It wants the Senate to pass proposed  
> research and
> > >> development tax changes."
> > >>
> > >>
> > >> Worth a read - here's hoping they're met with some success.
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