Game Associations Call for Tax Credits on Game Production and Esports Tournaments

▲ Korea Games Industry Association

Major organizations within the gaming industry have urged the government to introduce tax benefits for game production costs and esports tournaments in connection with the 2026 tax code revision.

Five industry bodies—the Korea Game Developers Association, the Korea Games Industry Association, the Korea Mobile Game Association, the Korea AI Game Association, and the Korea eSports Association—issued a joint statement today making the appeal.

The five organizations pointed out, "Games, which account for about 60% of K-content exports, remain excluded from production cost tax credits, and tax credits for the operating expenses of esports tournaments are facing expiration at the end of 2026."

According to the game industry associations, the current Restriction of Special Taxation Act applies tax credits to production costs for video contents such as films, broadcasting, and OTT services, as well as webtoons.

However, games, which drive the largest share of content sector exports, have been excluded from the entry stage.

The associations emphasized, "While companies can utilize R&D tax credits or integrated investment tax credits, they are structured mainly around technological development and tangible asset investments, failing to adequately cover costs unique to game production such as planning, scenario writing, graphics, and localization."

Citing related research by the Korea Creative Content Agency, they also stressed that introducing a game production cost tax credit system would generate production inducement effects worth 2.255 trillion won and create around 15,000 jobs over five years.

They also noted that major competing nations such as the United Kingdom, France, and Canada operate production cost deduction and rebate programs of 25% to 30% or more.

The five organizations further emphasized the need to extend and expand the scope of tax credits for esports tournament operating expenses.

Currently, domestic corporations holding esports tournaments outside the greater Seoul area receive a 10% corporate tax deduction on operating expenses.

The Ministry of Economy and Finance proposed ending the tax credit at the end of 2026 in the latest revision plan and shifting to financial spending instead.

The five groups stressed, "Financial projects that support only a select number of tournaments through open competitions and selections are insufficient to broadly induce voluntary private hosting and investment. Tax credits applied retroactively to companies that actually host tournaments and incur expenses are an essential system."

They also argued, "To vitalize the hosting of international tournaments, which is a crucial task for esports development, the eligible hosting locations should be expanded nationwide to include the greater Seoul area, and the tax credit rate should be raised from 10% to 20%."

(Photo provided by Korea Games Industry Association, Yonhap News)

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