A recent study conducted by British Think Tank TaxWatch UK has brought to light shocking info on Rockstar Games’ clever tax evasion in the UK. If the report is to be believed, Rockstar Games has evaded millions of tax pounds, and even received millions more in subsidies, simply by claiming that its blockbuster game Grand Theft Auto V, is British!
Tax Watch UK, a British online think tank portal recently shared a detailed report titled “Gaming the system.” The report suggests that Rockstar North (the major development studio behind Grand Theft Auto V) has evaded paying taxes in the UK for the last decade by off-shoring their profits. The news comes as a shock since GTA V is one of the biggest global entertainment blockbusters of the 21st century, and has earned over 6 billion USD since its release in 2013. According to the report, Rockstar has reported a profit of only £47.4 million, although a bonus pool of more than $3 billion was reportedly distributed amongst high ranking officials of the company.
Therefore, although GTA V is one of the highest-earning games of all time, Rockstar apparently has only a small share of the massive profits. In fact, the share was so small that it made Rockstar and Take-Two (Rockstar’s parent company) eligible for tax breaks. Not only did they not pay any taxes, but they also applied for, and surprisingly enough, got over $50 million in tax credits under the UK’s Video Game Tax Relief Scheme since 2015.
It is no rocket science to say that this huge tax mistake was nothing but just another example of corrupt bureaucracy playing around with legal loopholes. TaxWatch has reported that the said Tax Break scheme was directed towards smaller, less financially profitable game developers who were making on games that were “culturally British.” If you’ve ever played GTA V for 5 minutes, you know that it’s light years away from ‘British Culture.’ The game is set in a parody city of Los Angeles, the characters have American accents, and even the steering wheels are on the left!
So how can GTA V be British?
Apparently, all a developer needs to do to qualify their game as ‘British Cultured’ is just to claim that the said game was developed in the UK itself. That’s all it takes. So by claiming that GTA V was developed in Britain itself, Rockstar games managed to skim away billions of dollars in profits without having to pay a penny of tax pounds.
George Turner, the director of Tax Watch, has called the whole fiasco “a drive-by assault on the British taxpayer.” Taxwatch has also sternly stated in the report that Rockstar games should be substantially liable to pay taxes.
Moreover, they have further recommended a review of the Video Game Tax Relief scheme. As for Rockstar and Take-Two, while TaxWatch has acknowledged the fact that nothing they did was illegal, it has also asked Her Majesty’s Revenue and Customs to take a look into the case and review the companies’ profit segregation.