As mentioned a little while ago, the U.S. seems to have decided not to challenge alleged Canadian tax incentives to lure TV and film production. But now the UK is alleging that Canada is using tax breaks to get video game producers to locate there:
UK Culture Minister Margaret Hodge says the UK could challenge the legality of Canada's generous tax credits so that other nations can compete on a more even playing field.
Hodge, the UK Minister of State for Culture, Media and Sport, told Channel 4 News it was possible that Canadian tax credits that offer Quebec region-based games companies such as Ubisoft and EA up to 40 percent of studio staff salaries refunded via tax rebates could breach WTO (World Trade Organization) laws."We're looking at what they [Canada] have done. We're not sure what they have done sticks by the WTO rules on competition and will have to think about challenging what they are doing if they are, in our lawyer's views, breaching those rules," said Hodge.
While the Canadian high commission maintains it is abiding by WTO rules, the incentives offered in the Quebec region have been cited by some in the UK games industry, and by others in wider circles, as reason for the loss of domestic gaming talent.
See also here and here. It sounds like this claim has many elements similar to the TV/film subsidies issue, as they both relate substatially to services.
