VGTC or R and D tax credit: which one for a video game studio?

Quick answer. The video game tax credit (CIJV) funds the creation and development of a video game work approved by the CNC, at 30 % of eligible expenses, up to a ceiling of 6 million euros per company and per financial year. The research tax credit (CIR) targets genuine research and development. You never choose in one block: you arbitrate expense by expense, and never count the same charge twice.

A studio producing a game blends two economic realities. On one side, a cultural work: game design, art, level design, sound, integration and testing phases. On the other, sometimes, genuine technical work: a proprietary engine, a matchmaking system, a procedural generation component that runs into an obstacle no one has yet cleared.

The two tax schemes that structure this sector do not speak the same language. The CIJV reasons in terms of a work, the CIR reasons in terms of research. Confusing the two is the first source of fragility we see in studio funding files. The right reflex is not to pick a side, but to map each expense line and attach it to a single scheme.

The video game tax credit is set out in article 220 terdecies of the French tax code (CGI). It covers the creation and development expenses of a video game work and equals 30 % of eligible expenses, up to a ceiling of 6 million euros per company and per financial year.

Two conditions shape eligibility.

1. A minimum development cost of 100,000 euros. Below that threshold, the game does not open the right to the scheme. This bar effectively excludes very small projects.
2. Obtaining CNC approval, granted in two stages: provisional approval at launch, then final approval. Approval relies on a cultural test assessing the content of the work (universe, narrative, contribution to the diversity of creation).

The scheme applies to expenses incurred until 31 December 2031, giving studios a clear planning horizon for their next productions.

The CIJV logic is therefore that of a work. The focus is on the creation and development of the game, not on the scientific novelty of the techniques used. A game can be beautifully built, commercially ambitious and fully eligible for the CIJV without containing a single ounce of research in the tax sense.

The research tax credit, provided for in article 244 quater B of the CGI, funds research and development expenses in the tax sense: fundamental research, applied research and experimental development.

The logic here is entirely different. Writing code that is new to your studio is not enough. You must demonstrate genuine research and development, meaning:

• an established state of the art, showing what existing knowledge already allows;
• a real scientific or technical uncertainty that this state of the art does not resolve;
• the lifting of obstacles that existing techniques did not allow you to overcome.

A proprietary engine, an artificial intelligence component or a rendering algorithm that are truly novel may fall under this logic. Routine game production, however complex, does not. This is the hardest distinction to get technical teams to accept: what is new and difficult for you is not necessarily new for the state of the art.

This is the principle we systematically stress in scoping meetings: the CIJV and the CIR do not combine on the same expenses. A single charge can never feed both credits.

That said, a single studio can fall under both logics on distinct expenses. It is in fact common. The creation and development of the game are carried by the CIJV, while a genuinely new technical component (an engine, a matchmaking system, an AI approach) is isolated and documented for the CIR.

The underestimated risk lies exactly there. In trying to maximise the tax return, some studios slide the same payroll or subcontracting expense into both bases. In a tax audit, that means a near-certain reassessment, and it weakens the whole file: an authority that detects double counting then examines everything else with suspicion.

Hayot Expertise tip. Draw a clear analytical boundary between the two bases from the very first euro spent, and document it. Proving the absence of double counting matters as much as justifying each credit taken on its own.

The arbitration is decided on three criteria: the real nature of the work, the available documentation, and the level of risk accepted in case of an audit.

Our take: for the vast majority of a game budget (game design, art, level design, integration, testing), the CIJV is the natural reflex, provided you aim for and obtain CNC approval. The CIR only makes sense on the fraction of work that genuinely clears the research bar. Not code that is new to you, but code that is new to the state of the art.

To grasp this sector tax credit mechanism, video games share family ground with the moving image: we explain it in our analysis of the film and audiovisual tax credit, where approval and the cultural test play a comparable role.

A few situations come up regularly and deserve to be handled upstream:

• The studio without CNC approval. Without approval, the CIJV cannot be mobilised. Only the expenses that genuinely belong to research remain, eligible for the CIR if they pass the state of the art test.
• The project below the 100,000 euro threshold. Below this minimum development cost, the CIJV is closed. The studio then relies on the CIR for any research work, or structures its funding differently.
• Outsourced work. When all or part of the development is entrusted to a service provider, qualifying the expenses and attaching them to the right base requires particular care, as subcontracting and in-house work do not follow the same rules.
• The multi-project studio. The 6 million euro ceiling is assessed per company and per financial year. A studio running several games at once must track this overall ceiling, not project by project.

Whatever credit you keep, it is the documentation that holds the file together. A poorly documented tax credit is a fragile one, even when the base is legitimate.

• For the CIJV: file the provisional approval request at the right time, follow the cultural test, trace creation and development expenses per work.
• For the CIR: build a technical file from the start of the financial year (state of the art, identified obstacles, experimental approach, results), rather than reconstructing it afterwards, once the audit is announced.
• Keep a clear analytical breakdown that isolates, expense by expense, what belongs to the CIJV and what belongs to the CIR.
• Keep supporting records of time spent and salaries assigned to eligible work, ideally via per-project time tracking.
• Document the boundary between the two bases to prove the absence of double counting.

This scoping work fits into the broader strategy of funding innovation through the CIR, CII and JEI status, which we build with directors ahead of production.

In a representative file we supported, a studio was preparing a game whose budget far exceeded 100,000 euros. Most of the costs (art creation, gameplay, production) fell within the CIJV base after CNC approval. In parallel, the team was developing a procedural generation technology that ran into a real technical obstacle. This fraction of expenses, isolated and documented separately, could be presented for the CIR, without ever being included in the CIJV base. Two credits, two watertight bases.

The real value of a firm on this kind of file does not lie in knowing the rates, which are public, but in drawing the boundary. Our view, shaped across studio files: the reflex of putting everything into the CIR because the studio writes code is a frequent and costly mistake. Most game budgets belong to the CIJV, which is broader and better suited to the nature of the activity. The CIR must remain the exception, reserved for the genuinely scientific fraction, or you build a file the authorities will take apart.

This boundary work is exactly what we frame with studio directors. Our dedicated video game studios sector page details how we support you, from the choice between CIJV and CIR through to securing the documentation. This article is informational; a decision specific to your studio requires reviewing your situation, your work and the rules in force.

• Double counting a single expense in both the CIJV and the CIR is the leading reason for reassessment on this kind of file.
• A CIR technical file rebuilt after an audit is announced has far less evidential value than one kept continuously.
• CNC approval must be prepared: provisional approval is requested at the right time, not once the game is released.
• The 100,000 euro minimum development cost conditions access to the CIJV: it must be secured and justified.