Sections

Rockstar hasn't paid UK corporation tax in ten years, claims investigative think tank

Grand Theft Auto V developer also issued claims worth over 42 million in Video Game Tax Relief

Rockstar North has paid no corproation tax over the past ten years, according to a report from investigative think tank, TaxWatch UK.

While the company has paid tax in some years, overall it has received more money back than it is paid out. According to Rockstar North's account filings on Companies House, in 2018 it recieved over 26.9 million in tax credit, up from 13.1 million the year prior.

Released over the weekend, the TaxWatch report also states the game giant has issued claims for 42 million in Video Game Tax Relief between 2015 and 2017; the figure accounts for 19% of all tax credits granted to the British games industry since the relief was introduced in 2014.

Video Game Tax Relief is available for games that pass a British "cultural test" which considers content, cultural contribution, development hubs, and personnel.

While published by US-based Rockstar Games, Grand Theft Auto V was developed by Rockstar North in Edinburgh, Scotland.

Since launching in 2013, Grand Theft Auto V has become the most profitable entertainment product of all time.

Between 2013 and 2018, TaxWatch estimates total sales of the game at $6 billion, with the developer's estimated operating profit reaching $5 billion, and total bonus pool of $3.4 billion available for top managers for the period.

The also report found that the seven UK-based Take-Two and Rockstar companies declared a total pre-tax profit of just 47.3 million between 2013 and 2018.

"This is a drive-by assault on the British taxpayer and corporate welfare scrounging at its very worst"

George Turner, TaxWatch director

The think tank is now calling on HMRC to "urgently investigate" the tax structure of Rockstar Games, and parent company Take-Two in the UK.

HMRC told GamesIndustry.biz that around half of large UK businesses are under investigation for tax reasons at any one time, and it cannot comment on a specific case.

"It is outrageous that the UK taxpayer is being asked to shell out tens of millions of pounds in subsidies to the developers of Grand Theft Auto, when at the time that the game's developers put in their tax credit application Grand Theft Auto V had already generated several billion dollars in sales and profits," said TaxWatch director George Turner.

"This is a drive-by assault on the British taxpayer and corporate welfare scrounging at its very worst.

"The Video Games Tax Relief was designed to help developers of games with a cultural content that would struggle to sell in the international market. The fact that such a large amount of that relief is going to the developers of Grand Theft Auto clearly shows that the relief is not working as intended."

Despite the well-documented success of Grand Theft Auto V, TaxWatch found the developer accounts boasted only "slender profits", describing the situation as "absurd" and suggesting the government conduct a review into Video Game Tax Relief.

"Furthermore there are serious questions over how the company has been treated for tax purposes in the UK," reads the report.

"Take-Two appears to believe that it is reasonable that close to 100% of the profit should flow to their US-based parent companies and senior management, whilst almost no profit flows back to the UK companies involved in either making or selling the game."

GamesIndustry.biz has reached out to Rockstar Games for comment but didn't receive a response in time for publication.

For the record: This article previously stated that Rockstar North had "pocketed" 42 million in Video Game Tax Relief. However, according to the company's filing, it has yet to actually receive this money. The article has also been amended in several places for the purposes of clarity.

Related stories

The GamesIndustry.biz Podcast: Rockstar's tax returns

Also up this week: The troubles facing Improbable and SpatialOS, and what's the future of esports as Fortnite's popularity declines?

By GamesIndustry Staff

Nintendo: Red Dead 2 not being on Switch was down to timing

Reggie Fils-Aime says Switch emerged too late for Rockstar to consider the platform for its hit game

By Matthew Handrahan

Latest comments (5)

Robin Clarke Producer, AppyNation Ltd4 months ago
It's a shame this think tank thought they wouldn't be able to generate press coverage for their report without attacking and grossly misrepresenting the VGTR scheme.

Somehow I don't see them attacking Disney for taking advantage of incentives to film Star Wars in the UK. That's internationally successful and not set in the UK either.
5Sign inorRegisterto rate and reply
Jeremiah Moss Software Developer 4 months ago
"Take-Two appears to believe that it is reasonable that close to 100% of the profit should flow to their US-based parent companies and senior management, whilst almost no profit flows back to the UK companies involved in either making or selling the game."

This pretty much describes any tech company in any nation, heh. Corporate and shareholders get most of the profit
1Sign inorRegisterto rate and reply
Michael Wikan Video Game Industry/Government Contractor 4 months ago
Are they doing anything illegal? No?

Not a fan of Rockstar or their production practices but this is Clickbait.

Edited 1 times. Last edit by a moderator on 30th July 2019 12:37pm

3Sign inorRegisterto rate and reply
Show all comments (5)
James Coote Independent Game Developer 4 months ago
The global tax system is just plain out of date, and this applies to just about all digital products, whether it be buying Facebook ads or Netflix subscriptions, or indeed video games.

I personally think revenue should generally always be booked in the territory where the customer is located. People have been talking about this kind of reform for years, yet without it ever arriving. Seemingly due to a combination of weak political willpower and no country wanting to be the first to jump out of line and into a new system. It'd be better for TaxWatch and similar groups to use RockStar as an example of why the wider system needs to change. Rather than getting angry with and victimising whoever happens to be the biggest player in one single industry.

Edited 2 times. Last edit by James Coote on 29th July 2019 10:10pm

2Sign inorRegisterto rate and reply
Matthew Handrahan European Deputy Editor, GamesIndustry.biz4 months ago
@Michael Wikan: There are many ways of disagreeing with something without telling people to shut up. The tone is not acceptable.
4Sign inorRegisterto rate and reply

Sign in to contribute

Need an account? Register now.