Tax Subsidies for Video Game Companies?
The New York Times has a great article Rich Tax Breaks Bolster Makers of Video Games about government tax subsidies used by video games companies:
For example, Electronic Arts of Redwood City, Calif., shipped more than two million copies of Dead Space 2 in the game’s first week on the market this year. It shows a total of $1.2 billion in global profits the last five years using an accounting method that management says captures its operating profits.
But largely because of deferred revenue, deductions for executive stock options and a variety of accounting requirements, the company officially reports a net loss for the period. And the company reports that it paid out $98 million in cash for taxes worldwide in those years.
That’s a nice 8.2% tax rate captured through tax deductions available for software development. But, things are a stalemate, as Canada offers a 37.5% of payroll deduction to video game companies. Have we entered the tax wars?
| This entry was posted on Sunday, September 11th, 2011 at 1:11 pm and is tagged with video games companies, video game companies, executive stock options, redwood city calif, tax subsidies, payroll deduction, dead space, deferred revenue, electronic arts, government tax, new york times, stalemate, tax deductions, two million, tax rate, software development, profits, accounting, canada. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback. |
