Rockstar North has used tax programs and different smart accounting to avoid paying corporate taxes within the United Kingdom for years, even while its most successful game GTA V has sold millions of copies and made billions of dollars.
That scenario is detailed in public tax filings for Rockstar North, Ltd. and highlighted in a searing report launched this weekend by a group known as Tax Watch, which describes itself as an “investigative think tank” and has previously gone after Starbucks and Google for supposed tax avoidance.
“It is a drive-by assault on the British taxpayer and company welfare scrounging at its very worst,” the group’s director George Turner stated in a press launch promoting the report over the weekend. A representative from Rockstar declined to give comment
Rockstar Games company is headquartered in New York and has studios globally, however, for a lot of the mega studio’s existence, the majority of the work making the GTA games has been carried out in Scotland at Rockstar North, which functions as its own firm for financial purposes. In 2018, Rockstar North reported earnings of £8,300,782 or just over 10 million USD. All the while, it paid nothing in UK corporate taxes, due to in large part to claiming greater than £19 million (or $23 million) in tax credit through the UK’s Video Game Tax Relief program, which Rockstar managed to qualify for in 2016. That authorities program was designed to support British games financially and require them to contain British themes and/or be crafted by lots of British folks, the latter of which probably qualified Rockstar.
The Tax Watch group calls the situation “absurd,” saying this system was intended to help smaller game makers and not spare one of the most profitable game corporations in history from paying corporate tax. They’re particularly scornful of the accounting that appears to cast creating GTA as a barely-profitable enterprise for Rockstar North, as U.S.-based publisher Take-Two claims a lot of the revenue for itself.