Copyright tax regime in the games industry

  Natascha Rommens        25/02/2025

Managing your game company involves more than just creating outstanding games. It also requires a solid understanding of the rules and regulations to optimize your business. One of those regulations is the revised Copyright Tax Regime. We’ve commissioned KPMG to deliver a detailed overview on incorporating copyright allowances into your business strategy.

Some context

Belgium’s high tax burden on wages pushes employees’ salaries quickly into the 50% tax bracket, to be increased with social security contributions. Creative profiles can transfer (or license) their copyrights to their client/employer (company) using the copyright tax regime. In return, the copyright allowance they receive, benefits from a favourable tax treatment. The copyright allowance – as movable income – is only taxed at a flat rate of 15%. Up to 2023, copyright allowances for employees were also subject to social security contributions.

For many years, in creative sectors, such as the games industry (as well as in the classic software sector), this system was an integral part of employees’ salary package. In tax practice, it was generally assumed that up to 25% of the salary package could be paid out under the form of a copyright allowance.

However, as of 2023, the tax copyright regime was thoroughly reformed. A number of additional conditions were introduced and the aim was to limit this benefit to the “artistic sectors”. Under this reform, the social security was also aligned with the tax regime. As a result, since January 1st 2023, copyright allowances received by employees are now also exempt from social security contributions.

It goes without saying that the revised copyright tax regime sparked considerable debate within the IT sector, especially the games industry. Indeed, the then Finance Minister had argued that the reform meant that employees active in the IT sector were no longer covered by the copyright regime since then. This was also confirmed by the Constitutional Court at the end of last year. At the same time, “creative profiles” (also in the games industry) would however still be able to benefit from the regime.

Until fairly recently, it was however not clear for which profiles in the games industry this regime could still be applied as of 2023. The Ruling Commission – and the new federal government – finally bring light into the darkness.

Audiovisual creative jobs within the IT sector? Ruling Commission said yes!

Employees active within the games industry can generally be divided into two types of job profiles, (i) on the one hand there are the profiles that are engaged in pure software development (e.g. programmers) and (ii) on the other hand there are the profiles that are engaged in the audiovisual aspects of the game (e.g. designers, artists, scripters, …).

Based on a recently published ruling (no. 2024.0599 dd. 22.10.2024), the Ruling Commission is of the opinion that audiovisual functions within the games sector such as designers, artists, writers, scripters and animators etc. fall within the scope of the copyright regime amended since 2023.

Furthermore, this ruling explicitly states the applicable percentages per profile. In doing so, these vary between 7.5% and 21.25% of the salary package (technically the “financial envelope” = gross remuneration subject to employee social security contributions prior to deduction of personal social security contributions). This corresponds to a creative time commitment ranging between 30% and 85%. Per job profile, the percentages of copyright allowance were set in the ruling as follows:

The Ruling Commission hence confirmed that many creative profiles in the games industry still qualify for the as of 2023 revised copyright tax regime reformed since 2023. Since no social security contributions are due, the benefit for those profiles is even higher than before 2023.

However, programmers are no longer in scope

Unfortunately, profiles developing software remain excluded under the new regime. Although this was not explicitly addressed in this ruling, we may assume that mixed profiles (those that partly develop software and partly audiovisual works) will be eligible on a pro rata basis (i.e., with a lower percentage of copyright allowance).

Example calculation methodology

Assume an Animation Director receives an annual gross remuneration of 60,000 EUR. The copyright allowance was set at 12.50% of the financial envelope. Consequently, the copyright allowance is determined as follows:

More good news thanks to the federal coalition agreement

Thanks to this recent ruling, there is finally clarity that under the 2023 revised regime, at least some of the employees (and freelancers) in the games industry can still enjoy the tax system of copyrights worry-free. Programmers, however, fell by the wayside…

However, even for these job profiles, the federal coalition agreement of January 31st, 2025 brings good news. The federal government is reopening the door to the entire IT sector, i.e. both software developers and audiovisual profiles. Indeed, the coalition agreement states that the copyright tax regime will be extended in order to end the existing discrimination that exists between digital professions and other professions. This would mean that software developers would also be able to benefit from the copyright regime once again.

Patience is key. The provisions of the federal coalition agreement do not yet have immediate effect. They still need to be put into a legal text. It remains to be seen when and in what form the extension of the scope will take effect. To be continued… But in the meantime, the audiovisual profiles in the game industry can already make carefree use of the system that has been reformed since 2023.

Need more info?

KPMG has a team specialised in the taxation of the game industry, closely monitoring further developments. Should you have additional questions regarding the above-mentioned novelties or their practical feasibility, you can always contact them directly: Hendrik Putman (Partner KPMG, hputman@kpmg.com), Nele Steurbaut (Executive Manager, nsteurbaut@kpmg.com) or Ann-Sofie De Groote (Adviser, adegroote@kpmg.com).

Disclaimer: This document provides information only and does not constitute legal advice.