Income Tax Assessment (Digital Games Tax Offset) Rules 2023

This instrument, the Income Tax Assessment (Digital Games Tax Offset) Rules 2023, prescribes procedural rules and administrative arrangements for applications, provisional applications, advisory board operation, and related information requirements connected with Division 378 of the Income Tax Assessment Act 1997 (the Act). It is made under sections 378‑100 and 378‑105 of the Act (s 3). The Rules come into effect as specified in the commencement table: the whole instrument commences on the later of immediately after commencement of Schedule 1 to the Treasury Laws Amendment (2022 Measures No. 4) Act 2023 and the day after registration (s 2).

Mechanically, the Rules do the following.

Establish an administrative pathway for companies or head companies to apply for certificates that underpin entitlement to the digital games tax offset under Division 378 of the Act: completion, porting or ongoing development certificates (Schedules and ss 6, 11). The instrument requires that applications be made in writing, authorised, and submitted electronically to the Arts Secretary in the form published on the Arts Department website (s 6; s 14 for provisional certificates).
Prescribe the information and documentary material that must accompany both full applications (Schedule 1) and provisional applications (Schedule 2). The Schedules set out detailed items: applicant identity and residency, related parties, full expenditure statements, dates, platform/genre/synopsis, classification and gambling considerations, foreign currency translation and permanent establishment evidence where applicable (Schedule 1 Parts A-B; Schedule 2).
Create the Digital Games Tax Offset Advisory Board (the Board) (s 21) and set its functions, membership (Chair plus two members), meeting procedures, conflict disclosure, confidentiality duties and powers to seek third‑party information and independent expert reports (ss 22-33; ss 8 and 16 enable expert reports).

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Commonwealth Coat of Arms of Australia

Income Tax Assessment (Digital Games Tax Offset) Rules 2023

I, Tony Burke, Minister for the Arts, make the following rules.

Dated 4 July 2023.

TONY BURKE

Minister for the Arts

Contents

Part 1—Preliminary

1 Name

2 Commencement

3 Authority

4 Definitions

Part 2—Certificates for digital games tax offset

5 Definition for Part 2

6 Form of application for certificate

7 Amendment or withdrawal of application for certificate

8 Board to consider application for certificate if requested

9 Request for additional information

10 Board to advise Arts Minister

11 Amendment of certificate

Part 3—Provisional certificates for digital games tax offset

12 Definition for Part 3

13 Application for provisional certificate

14 Form of application for provisional certificate

15 Amendment or withdrawal of application for provisional certificate

16 Board to consider application for provisional certificate

17 Board may request additional information

18 Refusal to issue provisional certificate

19 Notice of refusal to issue provisional certificate

20 Content of provisional certificate

Part 4—Digital Games Tax Offset Advisory Board

21 Establishment of the Board

22 Functions of the Board

23 Membership of the Board

24 Leave of absence

25 Acting Appointment

26 Resignation of members

27 Termination of members

28 Duty of confidentiality

29 Disclosure of interests

30 Meetings of the Board

31 Quorum

32 Conduct of meetings

33 Powers, functions and decisions without meetings

Schedule 1—Information and documents required for an application for certificate

Part A—Information to be included in an application for a certificate

Division 1—Information about the applicant

Division 2—Information about the digital game

Division 3—Financial information

Part B—Documents to be attached to an application for a certificate

Schedule 2—Information and documents required for an application for provisional certificate

Part A—Information to be included in an application for a provisional certificate

Division 1—Information about the applicant

Division 2—Information about the digital game

Part B—Documents to be attached to an application for a certificate

Part 1—Preliminary

1 Name

This instrument is the Income Tax Assessment (Digital Games Tax Offset) Rules 2023.

2 Commencement

(1) Each provision of this instrument specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

Commencement information
Column 1 Column 2 Column 3
Provisions Commencement Date/Details
1. The whole of this instrument The later of: (a) immediately after the commencement of Schedule 1 to the Treasury Laws Amendment (2022 Measures No. 4) Act 2023; and(b) the day after this instrument is registered.

Note: This table relates only to the provisions of this instrument as originally made. It will not be amended to deal with any later amendments of this instrument.

(2) Any information in column 3 of the table is not part of this instrument. Information may be inserted in this column, or information in it may be edited, in any published version of this instrument.

3 Authority

This instrument is made under sections 378‑100 and 378‑105 of the Income Tax Assessment Act 1997.

Note: Section 4 of the Acts Interpretation Act 1901 allows for the exercise of new powers between enactment and commencement of the relevant Act which confers the new powers.

4 Definitions

Note: A number of expressions used in this instrument are defined in the Act, including the following:

(a) Arts Minister;

(b) Arts Secretary;

(d) digital games tax offset;

(e) head company;

(f) qualifying Australian development expenditure.

(1) In this instrument:

Act means the Income Tax Assessment Act 1997.

Arts Department means the Department administered by the Arts Minister.

Board means the Digital Games Tax Offset Advisory Board established under section 21.

certificate means a completion certificate, a porting certificate, or an ongoing development certificate, issued by the Arts Minister under section 378-25 of the Act.

independent expert means a person who, in the Board’s opinion:

(a) has recent, relevant experience in development, business or financial management in the digital games sector; and

(b) is independent of the applicant company or head company in relation to whom they are asked, under subsection 8(2) or 16(2) of this instrument, to provide a written report.

provisional certificate means a provisional certificate issued by the Board under section 16 of this instrument.

(2) For the purposes of this instrument, if an applicant company (the incoming company) takes over the making of a digital game from another company (the outgoing company), any activities carried out, or arrangements made, by the outgoing company in relation to the digital game are taken to have been carried out or made by the incoming company in relation to the digital game.

Part 2—Certificates for digital games tax offset

Note: Under section 378-90 of the Act, applications may be made to the review of the following decisions made by the Arts Minister by the Administrative Appeals Tribunal:

(a) a decision to refuse an application for a certificate, under section 378-25 of the Act;

(b) a determination of the total of a company’s qualifying Australian development expenditure, under section 378-30 of the Act;

(d) a decision to amend or refuse to amend a certificate, under section 378-75 of the Act.

5 Definition for Part 2

In this Part:

applicant means a company or a head company that is applying, or has applied, for a certificate for the digital games tax offset to be issued under section 378-25 of the Act and in accordance with this Part.

6 Form of application for certificate

An application for a certificate must:

(a) be made to the Arts Minister in writing; and

(b) include the information and documents specified in Schedule 1; and

(d) be submitted electronically to the Arts Secretary, in the form notified on the Arts Department’s website from time to time.

Note: An application is taken to be submitted to the Arts Secretary when the applicant is notified of its receipt.

7 Amendment or withdrawal of application for certificate

An applicant may:

(a) make amendments to their application for a certificate; or

(b) withdraw their application;

by notifying the Arts Secretary in writing, in the form notified on the Arts Department’s website from time to time.

Note: Section 378-75 of the Act deals with making amendments to a certificate that has already been issued and time limits apply.

8 Board to consider application for certificate if requested

(1) If the Arts Minister asks the Board to advise in relation to an application for a certificate, the Board must:

(a) consider the application; and

(b) advise the Arts Minister, as requested and in accordance with section 10.

(2) For paragraph (1)(a), in considering the application, the Board:

(a) may seek information or advice from any person or source; and

(b) may take into account the knowledge and experience of its members; and

(c) may ask an independent expert to provide a written report to the Board about any matter that is relevant to whether a condition set out in subsection 378-25(7) of the Act has been met in relation to the application; and

(d) must consider the following information:

(i) the application and its accompanying information and documents;

(ii) any written report requested by the Board under paragraph (2)(c);

(iii) any comment or submission made by the applicant, in response to an opportunity given under subsection (4) or (5), that is provided within the period specified in subsection (6) or within the period as extended under subsection (8);

(iv) any additional information provided by the applicant in response to a request under subsection (8);

(v) any other information or advice obtained by the Board that it considers relevant.

(3) A report under paragraph (2)(c) may also include advice about any of the following matters:

(a) whether specific items claimed in the applicant’s expenditure statement are reasonably attributable to the estimated qualifying Australian development expenditure on the digital game;

(b) whether the applicant is an appropriate entity to apply for the certificate in relation to a particular digital game;

(c) whether the digital game for which the applicant is applying for a certificate meets the criteria of a ‘digital game’ under section 378-20 of the Act.

(4) If the Board intends to use information or advice from a third party to support advice to the Arts Minister, the Board must give the applicant an opportunity to make a written submission to the Board on the substance of that information or advice.

(5) If the Board asks an independent expert to provide the Board with a written report under subsection (3), the Board must:

(a) give a copy of the report to the applicant to whom it relates as soon as practicable; and

(b) give the applicant an opportunity to make a written submission to the Board in response to the report.

(6) Subject to subsections (7) and (8), if the applicant is provided with an opportunity to comment or to make a written submission under subsection (4) or (5), the applicant has 28 days to do so from the day they are notified of the opportunity.

(7) The applicant may ask the Board to extend the 28-day period referred to in subsection (6).

(8) A request under subsection (7) must be made:

(a) in writing; and

(b) within the 28-day period referred to in subsection (6).

(9) The Board may extend the period in which the applicant is to provide a comment or written submission.

(10) If an applicant does not provide a response within the 28-day period referred to in subsection (5), or any extended period under subsection (9), the Board may proceed to advise the Arts Minister.

9 Request for additional information

(1) If, in the opinion of the Board, it requires additional information in order to provide advice to the Arts Minister about an application, the Board may request the applicant, in writing, to provide that information to the Board.

(2) The request must specify:

(a) the information required by the Board (the additional information); and

(b) the period within which the additional information must be provided to the Board (the notification period).

(3) The applicant may ask the Board to extend the notification period.

(4) A request under subsection (3) must be made:

(a) in writing; and

(b) within the notification period specified under section (3).

(5) The Board may extend the notification period.

(6) If an applicant does not provide the additional information within the notification period, or within the notification period as extended under subsection (5), the Board may proceed to advise the Arts Minister, as requested and in accordance with section 10.

10 Board to advise Arts Minister

(1) For paragraph 8(1)(b), if the Arts Minister has asked the Board to advise about an application for a certificate, the Board must advise the Arts Minister, in writing:

(a) whether the Board is satisfied that the conditions set out in section 378‑25 of the Act are met in relation to the application; and

(b) whether it considers that the Arts Minister should or should not issue a certificate to the applicant.

(2) If the Board advises the Arts Minister:

(a) that it is not satisfied that a condition set out in section 378‑25 of the Act is met in relation to an application; or

(b) that it considers that the Arts Minister should not issue a certificate to an applicant;

the Board’s written advice to the Arts Minister must include reasons for that advice.

11 Amendment of certificate

Note: In accordance with this section and with section 378-75 of the Act, if a certificate has been issued to an applicant under section 378-25 of the Act, the applicant may request, within four years of the certificate being issued, that the certificate be amended. The Arts Minister may also, subject to section 378-75 of the Act, amend the certificate on their own initiative.

(1) To request an amendment to a certificate issued to an applicant under section 378-25 of the Act, the applicant must:

(a) submit their request electronically to the Arts Minister, in the form notified on the Arts Department’s website; and

(b) include in their request the following information:

(i) the aspects of the certificate to be amended;

(ii) the reason for requesting the amendment; and

(iii) full and complete supporting documentation relevant to the amendment request.

(2) If the Arts Minister receives a request under subsection (1), the Arts Minister may:

(a) request further information from the applicant; or

(b) make a decision under section 378-75 of the Act to:

(i) amend the certificate; or

(ii) not amend the certificate.

(3) The Arts Minister may ask the Board to advise about the amendment of an applicant’s certificate.

(4) If the Arts Minister has asked the Board to advise about the amendment of an applicant’s certificate, the Board must advise the Arts Minister, in writing:

(a) whether the Board considers that the Arts Minister should or should not amend the certificate; and

(b) on any other matter on which the Arts Minister has asked the Board to advise.

Part 3—Provisional certificates for digital games tax offset

Note: A provisional certificate for the digital games tax offset:

(a) does not entitle an applicant to claim a tax offset under Division 378 of the Act;

(b) does not prevent a decision by the Arts Minister to refuse to grant a certificate under Division 378 of the Act; and

12 Definition for Part 3

In this Part:

applicant means a company or a head company that is applying, or has applied, in accordance with this Part, for a provisional certificate for the digital games tax offset.

13 Application for provisional certificate

(1) A company may apply to the Board for a provisional certificate in relation to a digital game if:

(a) the company:

(i) is an Australian resident; or

(ii) is a foreign resident that intends to establish a permanent establishment in Australia; or

(iii) is a foreign resident that has a permanent establishment in Australia and has an ABN; and

(b) the company is primarily responsible for undertaking activities necessary for the development of the digital game in Australia.

(2) For the avoidance of doubt, an applicant may apply for a provisional certificate in relation to a digital game even if the Board has already issued a provisional certificate, or has refused to issue a provisional certificate, to the applicant in relation to that digital game.

Note: A company may apply for a provisional certificate under subsection 13(1) before the digital game is completed.

14 Form of application for provisional certificate

An application for a provisional certificate must:

(a) be made in writing; and

(b) be authorised by the applicant, or by a person authorised to do so on behalf of the applicant; and

Note: An application is taken to be submitted to the Arts Secretary when the applicant is notified of its receipt.

15 Amendment or withdrawal of application for provisional certificate

(1) An application for a provisional certificate cannot be amended after being made.

(2) Prior to a provisional certificate being issued by the Board to an applicant, the applicant may withdraw their application for the certificate by notifying the Arts Secretary in writing, in the form notified on the Arts Department’s website.

16 Board to consider application for provisional certificate

(1) If an applicant applies to the Board for a provisional certificate, the Board must:

(a) consider the application; and

(b) issue or refuse to issue a provisional certificate.

(2) For paragraph (1)(a), in considering the application, the Board:

(a) may seek information or advice from any person or source; and

(b) may take into account the knowledge and experience of its members; and

(c) may ask an independent expert to provide a written report to the Board about any matter that is relevant to whether a condition set out in subsection 378-25(7) of the Act would be met if the applicant were to apply for a certificate to be issued under section 378-25; and

(d) must consider the following information:

(i) the application and its accompanying information and documents;

(ii) any written report requested by the Board under paragraph 2(c);

(iv) any additional information provided by the applicant in response to a request under section 17;

(v) any other information or advice obtained by the Board that it considers relevant.

(3) A report under paragraph 2(c) may also include advice about any of the following matters:

(a) whether the applicant is the appropriate entity to apply for the provisional certificate in relation to a particular digital game;

(b) whether the digital game for which the applicant is applying for a provisional certificate meets the criteria of ‘digital game’ under section 378-20 of the Act.

(4) If the Board intends to use information or advice from a third party to inform its decision not to issue a provisional certificate to an applicant, the Board must give the applicant an opportunity to comment on the substance of that information or advice.

(5) If the Board asks an independent expert to provide the Board with a written report under subsection (2), the Board must:

(a) give a copy of the report to the applicant to whom it relates as soon as practicable; and

(b) give the applicant an opportunity to make a written submission to the Board in response to the report.

(7) The applicant may ask the Board to extend the 28-day period referred to in subsection (6) and the request must be made:

(a) in writing; and

(b) within the 28-day period referred to in subsection (6).

(8) The Board may extend the period in which the applicant is to provide a comment or written submission.

(9) If an applicant does not provide a response within the 28-day period referred to in subsection (6), or any extended period under subsection (8), the Board may proceed to issue or refuse to issue a provisional certificate.

17 Board may request additional information

(1) If, in the opinion of the Board, it requires additional information in order to decide whether or not to issue a provisional certificate, the Board may ask the applicant, in writing, to provide that information to the Board.

(2) The request must specify:

(a) the information required by the Board (the additional information); and

(b) the period within which the additional information must be provided to the Board (the notification period).

(3) The applicant may ask the Board to extend the notification period. The request must be made:

(a) in writing; and

(b) within the notification period specified under paragraph (2)(b).

(4) The Board may extend the notification period.

(5) If an applicant does not provide the additional information within the notification period, or within the notification period as extended under subsection (4), the Board may proceed to issue or refuse to issue a provisional certificate.

18 Refusal to issue provisional certificate

The Board must refuse to issue a provisional certificate if the Board is not satisfied that the conditions set out in section 378‑25 of the Act would be met, or be likely to be met, if the digital game were completed in accordance with the information supplied in the application.

Note: The Board may refuse to issue a provisional certificate on other grounds. For example, where the applicant does not provide additional information requested under section 17 of this instrument within the notification period, or extended notification period.

19 Notice of refusal to issue provisional certificate

(1) If the Board decides not to issue a provisional certificate, the Board must give the applicant written notice of the decision.

(2) The written notice must set out:

(a) if the Board was not satisfied that each relevant condition specified in section 378-25 of the Act would be met, or would likely be met, if the digital game were completed in accordance with the information supplied in the application; and

(b) any other grounds on which the Board made the decision to refuse to issue a provisional certificate.

(3) The Board must give the written notice to the applicant no later than 28 days after the Board’s decision not to issue the provisional certificate.

20 Content of provisional certificate

(1) A provisional certificate must state if the Board is satisfied that the conditions set out in sections 378-20 and 378‑25 of the Act would be met, or be likely to be met, if the digital game were completed in accordance with:

(a) the information supplied in the application; and

(b) the conditions (if any) specified by the Board in the provisional certificate.

(2) A provisional certificate must also state that it:

(a) does not entitle an applicant to claim a tax offset under Division 378 of the Act; and

(b) does not prevent a decision by the Arts Minister to refuse to grant a certificate under Division 378 of the Act; and

Part 4—Digital Games Tax Offset Advisory Board

21 Establishment of the Board

The Digital Games Tax Offset Advisory Board is established.

22 Functions of the Board

The Board is to perform the functions specified in paragraph 378-105(a) of the Act including the functions set out in this instrument.

Note: Paragraph 378-105(a) of the Act expressly gives the Board the following functions:

(a) to consider applications under subsection 378-55(1) of the Act for certificates under section 378-25 of the Act;

(b) to advise the Arts Minister on whether to issue certificates under section 378-25 of the Act;

(c) to perform other functions in relation to the operation of Division 378 of the Act (including the operation of rules made under section 378-100 of the Act) as are specified in rules made under that section.

23 Membership of the Board

(1) The Board consists of:

(a) a Chair; and

(b) two other members.

(2) The Chair is the person who, from time to time, performs the duties of an SES employee position in the Arts Department:

(a) with responsibility for the Arts; and

(b) which is nominated by the Arts Secretary for the purposes of this subsection.

(3) A member referred to in paragraph (1)(b) is to be appointed by the Arts Minister by written instrument for the period, not exceeding 3 years, specified in the instrument.

Note 1: An instrument appointing a member under this subsection is not a legislative instrument.

Note 2: A member may be re-appointed for more than one period, consecutively or non-consecutively, and there is no limit to the maximum cumulative duration for which a member may be appointed.

Note 3: Subsection 33(4) of the Acts Interpretation Act 1901 provides that where an Act confers a power to make appointments to an office, the power shall be construed as including a power to appoint a person to act in the office for up to 12 months.

(4) A member appointed under subsection (3) must be someone who, in the opinion of the Arts Minister, is, or has been, involved in the digital game development industry and has experience or expertise in digital game development activities, pipeline or budgets.

(5) A member holds office on a part-time basis.

24 Leave of absence

The Arts Minister may grant, on the terms and conditions (if any) the Arts Minister determines, a member leave to be absent from:

(a) a meeting or meetings of the Board; or

(b) performing the duties of the office.

25 Acting Appointment

(1) The Arts Minister may appoint a person to act as a member:

(a) during a vacancy in the office of the member (whether or not an appointment has previously been made to the office); or

(b) during any period, or during all periods, when the member is absent from duty or from Australia, or is, for any reason, unable to perform the duties of the office.

(2) Anything done by a person purporting to act under an appointment under subsection (1) is not invalid merely because:

(a) the occasion for the appointment had not arisen; or

(b) there was a defect or irregularity in connection with the appointment; or

(d) the occasion to act had not arisen or had ceased.

26 Resignation of members

A member may resign their appointment by giving written notice to the Arts Minister.

27 Termination of members

(1) The terms and conditions of the appointment of a member include the conditions set out in this section.

(2) The appointment of a member may be terminated by the Arts Minister for misbehaviour, or physical or mental incapacity.

(3) Without limiting subsection (2), a member referred to in paragraph 23(1)(b) may be terminated if:

(a) the member fails, without reasonable excuse, to comply with section 28 (duty of confidentiality) or section 29 (disclosure of interests).

(b) the member:

(i) becomes bankrupt; or

(ii) applies to take the benefit of any law for the relief of bankrupt or insolvent debtors; or

(iii) compounds with their creditors; or

(iv) makes an assignment of their remuneration for the benefit of their creditors; or

(c) the member is absent, except on a leave of absence granted under section 24, from performing the duties of the office for a continuous period of three months or longer.

(5) A termination under this section takes effect when the member is given written notice of the termination by the Arts Minister.

28 Duty of confidentiality

(1) Except in the performance of the functions of the Board, a member must not communicate, or use to gain an advantage for themselves, or someone else, information that is made known to the person in their capacity as a member.

(2) The duty in subsection (1) continues after the person ceases to be a member for any reason.

29 Disclosure of interests

(1) A member (other than the Chair) who has an actual, potential or perceived conflict of interest in relation to a matter that is to be considered by the Board must disclose the nature of the conflict, in writing, to the Chair prior to the consideration of that matter.

(2) If the Chair has an actual, potential or perceived conflict of interest in relation to a matter that is to be considered by the Board, the Chair must disclose the nature of the conflict, in writing, to the Arts Secretary prior to the consideration of that matter.

(3) A disclosure under subsection (1) or (2) must be made as soon as possible after the relevant facts have come to the member’s knowledge.

(4) Unless the Chair or the Arts Secretary, as applicable, consents in writing, the member:

(a) must not be present during any deliberation by the Board on the matter; and

(b) must not vote on the matter or otherwise take part in any decision of the Board on the matter.

(5) If consent is given in writing under subsection (4), the consent must be recorded.

30 Meetings of the Board

(1) The Chair may convene a meeting of the Board at any time.

(2) A meeting of the Board must be presided over by:

(a) if the Chair is present—the Chair; or

(b) if the Chair is not present—another person who, from time to time, performs the duties of an SES employee in the Arts Department that is nominated for the purposes of this paragraph by the Arts Secretary.

31 Quorum

(1) Subject to subsection (2), at a meeting of the Board a quorum is constituted by the Chair plus at least one other member.

(2) If two members of the Board are unable to participate in, or to continue to participate in, the performance of their duties as a result of the disclosure of an interest under section 29, the quorum necessary for a meeting of the Board is one.

Note: As a result of subsection 29(4) and section 31, the Board member who constitutes a quorum would be the only member entitled to vote in respect of the relevant matter.

32 Conduct of meetings

(1) A question arising at a meeting of the Board is to be determined by a majority of members of the Board present and entitled to vote on that question.

(2) The Chair has a deliberative vote and, if necessary, a casting vote.

(3) The Board may regulate proceedings at its meetings as it considers appropriate. However, proceedings at a meeting must not be inconsistent with the provisions in this Part.

Note: Section 33B of the Acts Interpretation Act 1901 provides for people to participate in meetings by various means of communication (for example, telephone or closed‑circuit television).

(4) Without limiting subsection (3), the Board may invite a person to attend a meeting for the purpose of advising or informing the Board on any matter.

(5) A person invited to attend a meeting under subsection (4) must not communicate, or use to gain an advantage for himself or herself, or someone else, information that is made known to the person as a result of being so invited.

(6) The Board must ensure that minutes of its meetings are kept.

33 Powers, functions and decisions without meetings

(1) Subject to subsection (3), the Board may exercise any of its powers or carry out any of its functions without a Board meeting being held if a majority of the members agree to the exercise of the power or the performance of the function without a meeting.

(2) If the Board exercises a power or carries out a function under subsection (1), the Board must ensure that a record of the agreement of the majority of members to exercise the power or perform the function without a meeting is kept.

(3) The members of the Board may pass a resolution without a Board meeting being held if a majority of the members entitled to vote on the resolution provide a statement in writing that they are in favour of the resolution.

(4) The resolution is taken to have passed when a majority of members entitled to vote on the resolution have each provided a statement in writing that they are in favour of the resolution.

Schedule 1—Information and documents required for an application for certificate

Note: See paragraph 6(b).

Part A—Information to be included in an application for a certificate

Division 1—Information about the applicant

1.1 Type of certificate for which the applicant is applying.

Note: The three types of certificate under section 378-25 of the Act are a completion certificate, a porting certificate, and an ongoing development certificate.

1.2 Registered name of the applicant.

1.3 ABN of the applicant.

1.4 For an applicant that is part of a tax consolidated group or a Multiple Entity Consolidated (MEC) group—the name and ABN of the head company of the tax consolidated group or MEC group.

1.5 The State or Territory in which the applicant is incorporated.

1.6 Registered address of the applicant.

1.7 A statement as to the tax residency of the applicant, including:

(a) where the company is an Australian resident—evidence the applicant is an Australian resident; and

(b) where the company is a foreign resident—details of the applicant’s permanent establishment in Australia.

1.8 Names and addresses of the applicant company’s directors (including company secretary, as applicable)

1.9 Documentation that outlines all relevant related parties in connection with the development of the digital game:

(a) where the applicant has connected companies or affiliated companies—a list of all companies likely to be ‘connected with’ or ‘affiliates of’ the applicant at the time of lodgement of the relevant tax return, highlighting any particular ‘related companies’ that may also intend to claim an amount under the Digital Games Tax Offset;

(b) where the applicant has associates—:

(i) a list of all associates or potential associates with whom transactions have been undertaken relevant to qualifying Australian development expenditure; and

(ii) for entities that the applicant has determined to not be associated (i.e. the potential associates), the applicant’s justification for this characterisation.

Note: For the purposes of the Digital Games Tax Offset, there are two definitions concepts of ‘relevant related parties’, which separately relate to the $20 million cap (section 378-15 of the Act) and calculating qualifying Australian development expenditure (section 378-35 of the Act).

1.10 Details of the contact person for the application, including all of the following:

(a) full name;

(b) position;

(d) business address;

(e) email.

1.11 Confirmation that the applicant is the company primarily responsible for undertaking the activities necessary for the development of the digital game in Australia.

Note: The Arts Minister must be satisfied that the conditions in section 378-25 of the Act are met, and that the applicant is primarily responsible for undertaking activities necessary for the development of the game in Australia.

Division 2—Information about the digital game

General information

2.1 Title of the digital game.

2.2 Platform/s of the digital game.

2.3 Genre of the digital game.

2.4 Synopsis of the digital game.

2.5 Specify the purpose for which the game was primarily developed.

2.6 Outline of any of the purposes for which the game was developed which relate to advertising or promoting a product, entity or service, or an industrial, corporate or institutional purpose.

2.7 Information on whether the digital game is, or will be, available over, or primarily accessed through, the internet, or if it only operates or will only operate when a user is connected to the internet.

2.8 Outline of any elements of the digital game that could result in the digital game being refused classification under the Classification (Publications, Films and Computer Games) Act 1995.

2.9 Outline of any elements of the digital game that could come within the definition of a gambling service within the meaning of section 4 of the Interactive Gambling Act 2001, or that otherwise are or will be substantially comprised of gambling or gambling-like practices.

2.10 If the type of certificate for which an applicant is applying is a completion certificate or a porting certificate—evidence of completion, including:

(a) details of how and where the digital game is available to the public;

(b) a copy of or access to a playable completed version of the digital game, if requested; and

(c) if the applicant developed the digital game under a contract entered into at arm’s length—a copy of the arm’s length contract.

Details of qualifying Australian development expenditure

2.11 An outline of the qualifying Australian development expenditure undertaken by the applicant on the digital game in Australia.

2.12 Details and documentation related to any companies and persons relevant to qualifying Australian development expenditure transactions.

Note: This could include confirmation that any companies or persons were Australian residents for tax purposes; that eligible work was undertaken on an eligible game etc.

Division 3—Financial information

3.1 Estimated dates:

(a) when qualifying Australian development expenditure on the digital game commenced; and

(b) when qualifying Australian development expenditure on the digital game ceased or will cease.

3.2 If applicable, a list with the amount(s) and type(s) of any Commonwealth, State or Territory grant or subsidy in relation to any development expenditure claimed as estimated qualifying Australian development expenditure for the digital game, specifying whether those subsidies are in relation to a program that is generally available to business or specific to the digital games sector.

3.3 An expenditure statement, including:

(a) the applicant’s estimated qualifying Australian development expenditure in Australian currency; and

(b) a description of each budget item for the digital game;

(c) in relation to expenditure between related parties (refer Schedule 1, Item 1.10) the identification of all specific transactions showing that they have been appropriately accounted for when calculating the qualifying Australian development expenditure; and

(d) details of the location/s in which each budget item for the digital game to be claimed as qualifying Australian development expenditure was incurred.

3.4 If applicable, a foreign currency statement, including:

(a) each amount of the applicant’s estimated qualifying Australian development expenditure that has been expended in a foreign currency, expressed in the relevant foreign currency; and

(b) each amount of the applicant’s estimated qualifying Australian development expenditure in paragraph (a) translated into and expressed in Australian currency using the applicable special translation rule in section 960-50(6) of the Act; and

3.5 Where the applicant has taken over the development of a digital game from another company (the outgoing company):

(a) details of any qualifying Australian development expenditure claimed as a result of the applicant taking over development, for the purposes of section 378-45 of the Act; and

(b) details of the outgoing company.

3.6 Where the applicant is a foreign resident for the purposes of the Act, supporting documentation to evidence that all relevant expenditure has been incurred through a permanent establishment, including:

(a) the estimated total amount of the expenditure; and

(b) the period or periods during which the expenditure was incurred; and

(c) whether, during the whole or a part of a period mentioned in paragraph (b), the applicant did not have a permanent establishment in Australia or an ABN and the applicable days in the relevant period.

Part B—Documents to be attached to an application for a certificate

1.1 A declaration made in digital form by the applicant or an authorised representative, stating that:

(a) the information contained in the application for the certificate; and

(b) each document attached to the application;

is correct and true in every particular.

1.2 A declaration under clause 1.1 has the effect of a statement to a taxation officer for the purposes of the Taxation Administration Act 1953.

Schedule 2—Information and documents required for an application for provisional certificate

Note: See paragraph 14(b).

Part A—Information to be included in an application for a provisional certificate

Division 1—Information about the applicant

1.1 Type of provisional certificate for which the applicant is applying.

Note: The three types of certificate under section 378-25 of the Act are a completion certificate, a porting certificate, and an ongoing development certificate.

1.2 Registered name of the applicant.

1.3 ABN of the applicant.

1.4 For an applicant that is incorporated in a State or Territory—the State or Territory in which the company is incorporated.

1.5 For an applicant that is not incorporated in a State or Territory—the place in which the company is incorporated.

1.6 Registered address of the applicant.

1.7 For an applicant that is an Australian resident—evidence the applicant is an Australian resident.

1.8 For an applicant that is a foreign resident—details of the company’s permanent establishment in Australia.

1.9 Names and addresses of the applicant’s company directors.

1.10 For an applicant that is part of a tax consolidated group—the full name and ABN of the head company of the tax group.

1.11 Details of the contact person for the application, including all of the following:

(a) full name;

(b) position;

(d) business address;

(e) email.

1.12 Confirmation that the applicant is the company primarily responsible for undertaking the activities necessary for the development of the digital game in Australia.

Division 2—Information about the digital game

2.1 Title of the digital game.

2.2 Platform/s of the digital game.

2.3 Genre of the digital game.

2.4 Synopsis of the digital game.

2.5 Specify the purpose for which the game was primarily developed.

2.6 Outline of any of the purposes for which the game was developed which relate to advertising or promoting a product, entity or service, or an industrial, corporate or institutional purpose.

2.8 Outline of any elements of the digital game that could result in the digital game being refused classification under the Classification (Publications, Films and Computer Games) Act 1995.

Details of qualifying Australian development expenditure

2.10 Estimated dates for when qualifying Australian development expenditure commenced and ceased/will cease to be incurred.

2.11 An outline of the qualifying Australian development expenditure intended to be incurred by the applicant on the digital game in Australia.

2.12 Confirmation that the applicant is the company primarily responsible for undertaking the activities necessary for the development of the digital game in Australia.

Part B—Documents to be attached to an application for a certificate

1.1 A declaration made in digital form by the applicant or an authorised representative, stating that:

(a) the information contained in the application for the certificate; and

(b) each document attached to the application;

is correct and true in every particular.

1.2 A declaration under clause 1.1 has the effect of a statement to a taxation officer for the purposes of the Taxation Administration Act 1953.

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Income Tax Assessment (Digital Games Tax Offset) Rules 2023

I, Tony Burke, Minister for the Arts, make the following rules.

Dated 4 July 2023.

TONY BURKE

Minister for the Arts

Contents

Part 1—Preliminary

1 Name

2 Commencement

3 Authority

4 Definitions

Part 2—Certificates for digital games tax offset

5 Definition for Part 2

6 Form of application for certificate

7 Amendment or withdrawal of application for certificate

8 Board to consider application for certificate if requested

9 Request for additional information

10 Board to advise Arts Minister

11 Amendment of certificate

Part 3—Provisional certificates for digital games tax offset

12 Definition for Part 3

13 Application for provisional certificate

14 Form of application for provisional certificate

15 Amendment or withdrawal of application for provisional certificate

16 Board to consider application for provisional certificate

17 Board may request additional information

18 Refusal to issue provisional certificate

19 Notice of refusal to issue provisional certificate

20 Content of provisional certificate

Part 4—Digital Games Tax Offset Advisory Board

21 Establishment of the Board

22 Functions of the Board

23 Membership of the Board

24 Leave of absence

25 Acting Appointment

26 Resignation of members

27 Termination of members

28 Duty of confidentiality

29 Disclosure of interests

30 Meetings of the Board

31 Quorum

32 Conduct of meetings

33 Powers, functions and decisions without meetings

Schedule 1—Information and documents required for an application for certificate

Several core concepts structure the Rules: certificates, provisional certificates, the Board, qualifying Australian development expenditure, applicant identity/residency and the evidentiary package required to substantiate claims.

Certificates and their types: The instrument uses the term certificate to describe completion, porting and ongoing development certificates issued by the Arts Minister under section 378‑25 of the Act. The Rules set process rules for applications (Part 2) and amendment requests (s 11). The substantive legal effect and eligibility criteria for these certificate types are set out in the Act (s 4 note of the Rules identifies that several expressions are defined in the Act).
Provisional certificates: Part 3 creates a distinct process for provisional certificates. A provisional certificate is explicitly administrative and provisional in effect: it does not entitle an applicant to claim the tax offset, does not prevent the Arts Minister later refusing a substantive certificate, and is not a guarantee of future licence to claim (Part 3 note; s 20(2)). The Board alone issues provisional certificates (s 16(1)(b)).
The Board and its advisory function: The Digital Games Tax Offset Advisory Board (the Board) is established by s 21. Its functions, as in s 22, include advising the Arts Minister on whether the conditions in section 378‑25 of the Act are met and performing other specified functions under the instrument. The Board may seek independent expert reports (ss 8(2)(c) and 16(2)(c)), take into account members’ knowledge, and obtain information from any source (ss 8(2)(a) and 16(2)(a)). The Rules set membership at three persons: a Chair who is a nominated SES officer in the Arts Department, plus two appointed members with digital game development industry experience (s 23).
Qualifying Australian development expenditure and related party issues: The Act defines qualifying Australian development expenditure (QADE); the instrument requires detailed expenditure statements and related‑party disclosures to support claims (Schedule 1 Divs 2-3). Applicants must provide itemised budget descriptions, location of expenditure, disclosures about subsidies/grants that fund claimed expenditure, and identification/justification of related parties and associates (Schedule 1 items 2.11, 3.3 and 1.9). The instrument flags the interplay of related‑party definitions for the $20 million cap (s 378‑15) and calculation of QADE (s 378‑35) (Schedule 1 note).
Residency and permanent establishment (PE): The Rules impose residency/PE thresholds for applicants. For provisional certificates, an applicant must be an Australian resident, a foreign resident that intends to establish a PE in Australia, or a foreign resident that has a PE in Australia and has an ABN (s 13(1)). The Schedules require evidence of residency or PE and for foreign residents documentation evidencing all relevant expenditure was incurred through a PE (Schedule 1 1.7; 3.6).
Procedural protections and administrative timelines: The Board must give applicants opportunities to respond to third‑party information and independent expert reports (ss 8(4)-(6), 16(4)-(6)), typically 28 days subject to extension (ss 8(6), 16(6)-(9)). The Board may request more information within a specified notification period and may proceed if applicants do not supply it (ss 9(1)-(6), 17(1)-(5)).

These concepts combine to produce an administrative apparatus where companies present a dossier substantiating the Australian content and expenditure of digital games; the Board filters, requests further evidence, commissions expert input, and advises the Arts Minister, who issues or refuses certificates under the Act. The Rules allocate decision‑making authority between the Board and the Arts Minister: the Board advises and issues provisional certificates, while the Arts Minister issues substantive certificates (ss 8, 16, 20, 22).

Primary affected parties are companies (or head companies), the Arts Minister and the Arts Department, the newly constituted Advisory Board and its appointed members, and indirectly taxation officers who will process claims supported by certificates.

Applicants and claimants: The Rules apply to any company or head company that applies for certificates under section 378‑25 of the Act (Part 2 definition at s 5) and to companies that apply for provisional certificates under Part 3 (s 12 definition). Applicants include Australian residents and certain foreign residents (s 13(1)). Affected companies will be those that develop digital games and wish to claim the digital games tax offset, particularly companies preparing to claim qualifying Australian development expenditure. The instrument requires detailed organisational, financial and project documentation (Schedules 1-2).
Head companies and consolidated groups: For applicants that are part of tax consolidated or Multiple Entity Consolidated groups, Schedule 1 requires the name and ABN of the head company (Schedule 1 1.4), and the Rules acknowledge that the head company can be an applicant. The instrument references related‑party definitions relevant to the $20 million cap (note in Schedule 1 1.9 referring to section 378‑15 of the Act) and to the calculation of QADE (section 378‑35), so companies in groups must disclose connected/affiliate entities and transactions between them (Schedule 1 1.9 and 3.3(c)).
Foreign companies and permanent establishments: Foreign residents who wish to participate are affected. s 13(1) allows foreign residents that intend to establish a PE in Australia, or have a PE and an ABN, to apply for a provisional certificate. Schedule 1 requires foreign resident applicants to provide documentation evidencing that relevant expenditure was incurred through a PE and to set out the period and amounts (Schedule 1 3.6).
The Arts Minister and Arts Department: The Arts Minister decides whether to issue, amend or revoke substantive certificates under the Act; the Rules frame how those decisions are to be informed, including requiring the Arts Minister to take Board advice if sought (s 8(1) and s 10). The Arts Secretary is the recipient of electronic submissions (s 6(d), s 14(c)).
The Board and its appointees: The instrument establishes positions for a Chair (an SES officer in the Arts Department nominated by the Arts Secretary) and two appointed members (s 23). Members must have industry involvement and experience in development activities, pipelines or budgets (s 23(4)). Members operate part‑time (s 23(5)), are subject to confidentiality obligations (s 28), must disclose conflicts (s 29), and may be terminated for misbehaviour, incapacity or specific breaches (s 27).
Taxation officers and review bodies: The Schedules provide that applicant declarations have the effect of a statement to a taxation officer under the Taxation Administration Act 1953 (Schedule 1 Part B 1.2 and Schedule 2 Part B 1.2), which can implicate administrative and criminal consequences under that Act for false statements. Decisions of the Arts Minister under Division 378 that are listed in the instrument can be reviewed by the Administrative Appeals Tribunal under section 378‑90 of the Act (note under Part 2).

Who pays and who decides: Applicants pay in time, effort and compliance cost to gather and present the required materials and to respond to Board requests; they also bear the risk of adverse decisions, accuracy declarations and potential penalties under taxation law. The Arts Minister and Board decide on issue, amendment and provisional issue. The Board provides advice, holds meetings, and can commission experts; the Arts Minister retains the power to issue or amend certificates under the Act (ss 8, 10, 11, 22).

The Rules allocate duties to applicants, the Board, Board members and the Arts Minister, and they create rights to procedural fairness and review.

Applicants’ duties and rights

Submission and authorisation: Applicants must submit applications in writing, authorised by the applicant or an authorised representative, and electronically to the Arts Secretary in the form notified on the Arts Department website (s 6(a)-(d); s 14 for provisional certificates). An application is taken to be submitted when the applicant is notified of its receipt (s 6 note; s 14 note).
Completeness and evidentiary duties: Applicants must include the information and documents prescribed in Schedule 1 for certificates and Schedule 2 for provisional certificates (s 6(b); s 14(a); Schedules 1-2). Schedules require a detailed expenditure statement, related‑party disclosures, foreign currency translation details, evidence of residency or PE, dates of expenditure, and declarations that the application and attachments are true and correct (Schedule 1 Part A-B; Schedule 2 Part A-B).
Amendment and withdrawal rights: An applicant may amend or withdraw an application for a certificate before it is decided by notifying the Arts Secretary in the form on the website (s 7). By contrast, for provisional certificates an application cannot be amended after being made (s 15(1)), but can be withdrawn prior to Board issuance (s 15(2)).
Right to comment on third‑party material and expert reports: If the Board intends to use third‑party information or a commissioned independent expert report, it must give the applicant an opportunity to make a written submission (ss 8(4)-(6), 16(4)-(6)). The applicant typically has 28 days to respond (ss 8(6), 16(6)), with rights to request extensions (ss 8(7)-(9), 16(7)-(9)).
Declarations treated as statements to taxation officers: The required digital declaration has the effect of a statement to a taxation officer under the Taxation Administration Act 1953 (Schedule 1 Part B 1.2; Schedule 2 Part B 1.2), creating duties to ensure accuracy given potential legal consequences.

Board duties and rights

Consideration and advice: If asked by the Arts Minister to advise on an application, the Board must consider and advise on whether the conditions in section 378‑25 of the Act are met and whether the Arts Minister should issue a certificate; if it advises negatively it must give reasons (ss 8(1), 10(1)-(2)). For provisional certificates, the Board must consider, then issue or refuse to issue a provisional certificate (s 16(1)).
Evidence gathering and expert commissioning: The Board may seek information from any person, use member expertise, and commission independent expert reports to address whether the Act’s conditions would be met (ss 8(2), 8(2)(c), 16(2), 16(2)(c)). The Board must provide copies of expert reports to applicants and offer an opportunity to respond (ss 8(5), 16(5)).
Request for additional information and proceeding without response: The Board may request additional information with a specified notification period and may proceed to advise or decide if the applicant does not provide that information (ss 9(1)-(6), 17(1)-(5)).

Board members’ duties and rights

Confidentiality: Members must not disclose or misuse information obtained in their capacity as members, and the duty continues after they cease to be members (s 28).
Conflict disclosure and recusal: Members (other than the Chair) must disclose actual, potential or perceived conflicts in writing to the Chair before consideration of the matter (s 29(1)); the Chair must disclose to the Arts Secretary (s 29(2)). Unless written consent is given, the conflicted member must not be present or vote (s 29(4)-(5)).
Attendance and meetings: The Chair may convene meetings (s 30(1)); meetings require a quorum of Chair plus one other member (s 31(1)). The Board may operate by written resolution or without meeting if a majority agrees (s 33).

Arts Minister duties and rights

Issuance, amendment and revocation: The Arts Minister issues certificates under section 378‑25 of the Act, may amend or refuse to amend certificates under section 378‑75 of the Act, and may ask the Board for advice on applications or amendments (s 11(3); ss 8, 11). The Rules allow the Arts Minister to request further information in considering amendment requests (s 11(2)(a)).
Appointments and terminations: The Arts Minister appoints the two non‑Chair Board members by written instrument for up to three years (s 23(3)), may grant leave (s 24), appoint acting members (s 25), and terminate members for misbehaviour or incapacity (s 27).

Rights of review and notice

AAT review: The instrument notes decisions covered by section 378‑90 of the Act are reviewable in the Administrative Appeals Tribunal: refusal to issue a certificate, determination of QADE, revocation, and refusal to amend a certificate (Part 2 note).
Notice obligations: If the Board refuses a provisional certificate, it must provide written reasons and any other grounds for refusal to the applicant no later than 28 days after the decision (s 19).

Taken together, the Rules create a rights/duties regime that emphasises evidentiary substantiation by applicants, Board investigatory and advisory powers (including use of outside expertise), and procedural protections in the form of comment opportunities, written reasons and administrative review avenues.

This instrument is primarily procedural; it does not itself create criminal sanctions or tax penalties. However, it interfaces with other statutes and administrative consequences which create enforcement pathways and potential penalties.

Administrative enforcement mechanisms and consequences

Decision consequences: The Arts Minister’s decisions to issue, refuse, amend or revoke certificates under Division 378 of the Act affect entitlement to the digital games tax offset. The Rules set out the administrative processes leading to those decisions (ss 6, 8, 10, 11, 16, 18-20). A substantive refusal or revocation will directly affect a company’s ability to claim the offset under the Act.
Termination of Board members: The Arts Minister may terminate a Board member’s appointment for misbehaviour or incapacity and for specified breaches such as unauthorised disclosure or failure to comply with confidentiality or disclosure requirements (s 27, including s 27(3)(a) referencing failure to comply with ss 28-29). Termination takes effect on written notice (s 27(5)).
Declarations treated as statements to taxation officers: The declarations required to be attached to applications (Schedule 1 Part B clause 1.1 and Schedule 2 Part B clause 1.1) have the effect of a statement to a taxation officer for the purposes of the Taxation Administration Act 1953 (Schedule 1 Part B clause 1.2; Schedule 2 Part B clause 1.2). This imports the statutory consequences for false or misleading statements under taxation law, which could result in administrative penalties or, in some cases, criminal prosecution under the Taxation Administration Act (the instrument does not itself state the specific penalties; it makes the declaratory linkage).
Procedural enforcement: The Board may proceed with advising the Arts Minister or deciding on a provisional certificate where the applicant fails to respond to information requests or to comment on third‑party information within prescribed or extended timeframes (ss 8(10), 9(6), 16(9), 17(5)). This procedural mechanism can lead to decisions made on incomplete material.

Review and judicial/tribunal oversight

Administrative Appeals Tribunal: The instrument explicitly notes that, under section 378‑90 of the Act, applicants can seek review in the Administrative Appeals Tribunal of specified Arts Minister decisions: refusal to issue a certificate, determination of the total of a company’s QADE, revocation of a certificate, and refusal to amend a certificate (Part 2 note). This gives an avenue for independent merits review of key adverse decisions.

No direct criminal or pecuniary penalties in the instrument itself

The Rules do not prescribe fines, imprisonment, or civil pecuniary penalties for non‑compliance with the instrument beyond the administrative consequences and the linkage to the Taxation Administration Act for applicant declarations. Employee or member misconduct consequences for Board members are internal (termination) rather than criminal within the instrument (s 27). The instrument does not create separate civil penalties for failure to provide information to the Board; instead, it allows the Board to proceed without the material (ss 9(6), 17(5)).

Enforcement of confidentiality and conflict duties

Board members are subject to a continuing duty of confidentiality (s 28) and disclosure obligations for conflicts of interest (s 29). A member’s failure to comply with ss 28 or 29 may be grounds for termination (s 27(3)(a)). The instrument provides for recusal and written consent procedures where conflicts arise (s 29(4)-(5)).

Practical enforcement risks for applicants

Because declarations are treated as taxation statements (Schedules 1-2), applicants face the risk that inaccurate or misleading information in expenditure statements, related‑party disclosures or residency/PE evidence could expose them to taxation administration penalties, audits, and potential review by the AAT if the Arts Minister’s decision depends on that information. The instrument requires applicants to substantiate QADE claims and related‑party transactions (Schedule 1 Div 3, items 3.3 and 1.9), making accuracy and record‑keeping central to enforcement risk.

In summary, enforcement under the Rules is administrative and procedural, with substantive enforcement risk channelled through the Taxation Administration Act for false declarations, the capacity for the Arts Minister to refuse/revoke certificates, and the ability of the AAT to hear merits review of certain decisions. The Rules themselves do not set out additional monetary penalties.

The Rules are an instrument subordinate to Division 378 of the Income Tax Assessment Act 1997 (the Act) and explicitly cross‑reference multiple provisions of the Act and other statutes. They function as implementation detail for the statutory offset and intersect with tax administration, classification and gambling regulation.

Primary statutory relationships

Income Tax Assessment Act 1997 (Division 378): The Rules are made under ss 378‑100 and 378‑105 of the Act (s 3). They repeatedly refer to substantive requirements in the Act: the definitions of “Arts Minister”, “Arts Secretary”, “digital game”, “digital games tax offset”, “head company”, and “qualifying Australian development expenditure” are stated as defined in the Act (s 4 note). The Board’s functions derive from paragraph 378‑105(a) of the Act (s 22). The Rules require consideration of whether conditions in sections 378‑20 and 378‑25 of the Act are met (ss 8(2)(c), 16(2)(c), s 20(1)).
Section 378‑90 (AAT review): The instrument notes which Arts Minister decisions are reviewable by the Administrative Appeals Tribunal under s 378‑90 of the Act (Part 2 note).
Other specific Act sections referenced: The instrument explicitly references (or notes interaction with) s 378‑15 (the $20 million cap relevant‑party rules), s 378‑30 (determination of total of a company’s QADE), s 378‑35 (calculation of QADE and related party concepts), s 378‑45 (takeover of development from another company), s 378‑70 (revocation), and s 378‑75 (amendments and time limits) (various notes and schedule items).

Taxation Administration Act 1953

Applicant declarations required by Schedules 1 and 2 Part B (1.1) are stated to have the effect of statements to a taxation officer under the Taxation Administration Act 1953 (Schedules 1 and 2 Part B clause 1.2). This imports enforcement and evidentiary regimes under taxation law for false or misleading statements, including administrative penalties and potential criminal liability as provided by that Act.

Other Commonwealth statutes

Classification and gambling laws: The Schedules require applicants to outline any elements of a digital game that could result in refusal of classification under the Classification (Publications, Films and Computer Games) Act 1995 (Schedule 1 Div 2 item 2.8; Schedule 2 item 2.8), and to outline elements that could come within the definition of a gambling service under s 4 of the Interactive Gambling Act 2001 or be substantially comprised of gambling or gambling‑like practices (Schedule 1 Div 2 item 2.9; Schedule 2 item 2.9). The instrument therefore requires applicants to disclose issues that may trigger classification or gambling regulatory concerns.
Acts Interpretation Act 1901: The instrument notes that section 4 of the Acts Interpretation Act allows for exercise of new powers between enactment and commencement (s 3 note). It also references subsection 33(4) relating to acting appointments (s 23 note) and section 33B concerning participation in meetings by electronic means (s 32 note).

Interplay with corporate and group tax rules

Related‑party and consolidation issues: Schedule 1 requires disclosure of connected and affiliated companies, potential associates and transactions between related parties. The Rules explicitly link these disclosures to the Act’s definitions, in particular the $20 million cap under s 378‑15 and QADE calculation under s 378‑35 (Schedule 1 note 1.9). Applicants in tax‑consolidated groups must supply head company details (Schedule 1 1.4 and Schedule 2 1.10).

Administrative law and procedural fairness

The Rules create procedural rights to be notified and to comment on third‑party information and independent expert reports (ss 8(4)-(6), 16(4)-(6)). They create written reasons requirements for Board advice where it is negative (s 10(2)) and require written notice of provisional certificate refusals with reasons within 28 days (s 19). Rights of merits review are flagged (Part 2 note). These procedural features interact with administrative law norms.

In practice, applicants must ensure their applications and supporting documents are consistent with the substantive tax law in Division 378, with taxation administration requirements, and must be attentive to classification and gambling law risks identified in the Schedules. The Rules operate as administrative machinery that references and relies upon the substantive provisions and enforcement regimes of the broader statutory framework.

The instrument includes a commencement table in section 2 which sets out when the whole instrument takes effect: the later of immediately after commencement of Schedule 1 to the Treasury Laws Amendment (2022 Measures No. 4) Act 2023 and the day after registration (s 2). The commencement table is accompanied by a formal note that the table relates only to the provisions as originally made and will not be amended to deal with later amendments of this instrument (s 2(1)-(2)). No amending provisions or subsequent variations are recorded in the text provided.

Key procedural points about amendments contained in the instrument

Amendments to applications and certificates: The Rules allow applicants to amend or withdraw applications for certificates before a decision is made by notifying the Arts Secretary in the prescribed electronic form (s 7). For provisional certificates, however, the Rules state that an application cannot be amended after being made (s 15(1)), though it may be withdrawn prior to issuance (s 15(2)). Once a certificate has been issued, the instrument notes by way of explanatory note that an applicant may request an amendment within four years of the certificate being issued and that the Arts Minister may also amend a certificate on their own initiative, subject to section 378‑75 of the Act (preceding s 11; s 11 formalises the process for requesting amendments).
Formal process for amending a certificate: Section 11 sets out how an applicant requests an amendment to an issued certificate: electronic submission in the Arts Department form, identifying aspects to be amended, reasons, and full supporting documentation (s 11(1)). The Arts Minister may request further information (s 11(2)(a)), and may seek Board advice (s 11(3)-(4)). The Board must advise whether it considers the Arts Minister should amend the certificate (s 11(4)(a)).
Instrument amendment authority: Section 3 records that the instrument is made under ss 378‑100 and 378‑105 of the Act. These sections of the Act authorise the making of rules. The instrument itself contains no internal mechanism for its own amendment; amendments would occur by making a later instrument under the enabling Act provisions.

Absence of recorded post‑enactment amendments

The text provided does not contain any later amendments, revocations, or notes indicating that parts of the instrument have been superseded. The commencement table’s note flags that it is not updated for later amendments , this is a standard drafting caution, not evidence of amendment.

Practical consequences for practitioners

Practitioners should treat the process and timelines for amendments as they appear in the instrument: provisional applications are final on lodgement (s 15(1)), and certificate amendments once issued follow the s 11 pathway and are subject to the Act’s s 378‑75 time limits (not detailed in the Rules but referenced). Any future changes to these Rules would be by later instruments made under ss 378‑100/378‑105 of the Act; the document itself signals where to look (the Act) for the scope of enabling powers.

In short, the Rules as provided establish a fixed procedural framework; they contain internal processes to amend applications and certificates, but do not themselves record any subsequent amendment history beyond the original commencement statement.

The instrument does not record any litigation history. It does, however, set out the administrative review avenues and decisions that are reviewable, which is germane to potential litigation or tribunal activity.

Review rights and potential litigation paths

Administrative Appeals Tribunal (AAT): The Rules explicitly note that, under section 378‑90 of the Act, an application may be made to the Administrative Appeals Tribunal for review of specified Arts Minister decisions: refusal to issue a certificate under section 378‑25, determination of the total of a company’s qualifying Australian development expenditure under section 378‑30, revocation of a certificate under section 378‑70, and a decision to amend or refuse to amend a certificate under section 378‑75 (Part 2 note). These are the principal administrative review mechanisms set out in the instrument.
Procedural decisions by the Board: The Board issues or refuses provisional certificates (s 16) and provides advice to the Arts Minister (s 8). While the Rules do not specify direct appeal rights from Board advice, adverse Arts Minister decisions (which may be founded on Board advice) are reviewable in the AAT as noted.
Declarations as taxation statements: Since application declarations have the effect of statements to a taxation officer under the Taxation Administration Act (Schedules 1-2 Part B clause 1.2), any proceedings that arise under taxation law (penalties, assessments, prosecutions) would follow the processes and litigation pathways in the Taxation Administration Act and related judicial/tribunal regimes.

Absence of named cases or precedents

The instrument contains no case references and does not cite litigation or judicial decisions. It therefore provides no internal litigation history or precedents.

Implication for practitioners

In the absence of any recorded litigation, the AAT is the predictable first forum for contesting adverse administrative decisions enumerated by the instrument and the Act. Practitioners should plan for administrative merits review where an Arts Minister decision affects entitlement to the tax offset (as listed in the Part 2 note). Any disputes that implicate statements made to taxation officers would proceed under the taxation administration framework and could involve the AAT, Federal Court, or other relevant forums depending on remedy sought and statutory routes.

In short, the instrument sets out the administrative review routes likely to be used in litigation relating to certificates and QADE determinations, but does not itself contain or cite a litigation history.

The Rules contain procedural requirements and traps for the unwary that can affect eligibility, timing and evidentiary exposure. The following items are concrete features drawing on specific provisions, not policy judgement.

Provisional ≠ entitlement

A provisional certificate does not create an entitlement to the tax offset, prevent later refusal of a substantive certificate by the Arts Minister, or guarantee future issuance (Part 3 note; s 20(2)). Clients may misread a provisional certificate as assurance of future tax benefit; the instrument warns explicitly that it is not.

No amendment of provisional applications after lodgement

An application for a provisional certificate cannot be amended after being made (s 15(1)). Applicants must ensure provisional applications are complete at lodgement. By contrast, full certificate applications can be amended prior to decision (s 7).

Electronic submission and specified form

Applications must be submitted electronically in the form notified on the Arts Department website (s 6(d); s 14(c); s 11(1)(a)). Failure to use the prescribed form or to submit electronically may render an application not in accordance with the Rules and may delay receipt notification (the instrument deems an application submitted when notified of receipt).

Declarations treated as taxation statements

The required digital declarations are statements to a taxation officer under the Taxation Administration Act (Schedule 1 Part B 1.2; Schedule 2 Part B 1.2). False or misleading information in an application therefore exposes applicants to taxation administration penalties and potential criminal consequences under that Act. The instrument does not detail penalties but creates the linkage.

Related‑party and $20m cap complexity

Schedule 1 requires detailed disclosure of connected, affiliated and associated entities and transactions (Schedule 1 1.9; 3.3(c)). The Rules remind applicants that separate related‑party concepts apply for the $20 million cap (s 378‑15 of the Act) and in calculating QADE (s 378‑35) (Schedule 1 note). Mischaracterising related‑party relationships or misallocating intra‑group transactions can affect claimed QADE and cap calculations.

Foreign companies and PE evidence

Foreign residents must provide evidence that relevant expenditure was incurred through a permanent establishment, including amounts and periods, and whether at any time the applicant lacked a PE or ABN and the applicable days (Schedule 1 3.6). Insufficient PE evidence may jeopardise claims and lead the Board to refuse provisional issuance (s 18) or advise refusal to the Arts Minister.

Board may proceed without applicant’s input

If an applicant fails to respond within the 28‑day period (or extended period) to comments on third‑party information or expert reports, the Board may proceed to advise or decide (ss 8(10), 16(9)). Similarly, if additional information requested is not provided within the notification period or extended period, the Board may proceed (ss 9(6), 17(5)). Applicants therefore risk adverse outcomes if they do not respond timely.

Independent expert reports and disclosure

The Board may ask independent experts to report on whether a condition set out in subsection 378‑25(7) of the Act has been met (ss 8(2)(c), 16(2)(c)). While applicants get copies and an opportunity to respond (ss 8(5), 16(5)), third‑party expert views can materially shape Board advice to the Arts Minister. Applicants should anticipate potential third‑party critiques and prepare rebuttal evidence promptly.

Takeover of development treated as incoming company’s activity

If an incoming company takes over development from an outgoing company, activities and arrangements by the outgoing company are taken to have been carried out by the incoming company (s 4(2)). Applicants who acquire projects must document prior expenditure and provide details of the outgoing company (Schedule 1 3.5). This has transactional accounting and evidentiary implications in acquisition contexts.

Confidentiality and conflict disclosure realities

Board members have a continuing duty of confidentiality (s 28) and must disclose conflicts (s 29). However, the Chair is an SES Arts Department officer nominated by the Arts Secretary (s 23(2)), which means departmental involvement in Board leadership is hardwired; practitioners should be aware of the Departmental anchor for governance and the practical effect of conflict disclosures where members have industry links.

Time limits for certificate amendment (Act reference)

The Rules note that time limits apply to amendments of issued certificates under section 378‑75 of the Act (s 7 note; preceding s 11). Practitioners must consult the Act for specific time limits and cannot assume indefinite ability to amend after issuance; the instrument’s s 11 process does not itself displace the Act’s limits.

Record‑keeping and translation rules

The Rules require a foreign currency statement including translation under the special translation rule in section 960‑50(6) of the Act (Schedule 1 3.4). Compliance requires accurate historic currency translation and coherent records, which can be onerous for multinational expenditure.

In short, key practical risks are: treating provisional certificates as definitive; failing to supply complete provisional applications; insufficient PE or related‑party documentation; missing response windows resulting in Board decisions without applicant input; and the legal exposure that arises from declarations treated as taxation statements.

This section sets out a practical compliance roadmap tied to the instrument’s requirements and timelines. It assumes the reader represents a company (or head company) intending to apply for a certificate or provisional certificate under Division 378 of the Act.

Pre‑application preparation

Determine eligibility under the Act: confirm that the project qualifies as a “digital game” and that the company is the entity primarily responsible for undertaking the activities necessary for development in Australia. The instrument repeatedly requires this confirmation (Schedule 1 1.11; Schedule 2 1.12; s 13(1) for provisional certificate applicants).
Identify company status: confirm whether the applicant is an Australian resident, a foreign resident with an Australian permanent establishment, or a foreign resident intending to establish a PE (s 13(1)). Gather documentary evidence of residency or PE (Schedule 1 1.7; 3.6; Schedule 2 1.7-1.8).
Map related parties and tax groups: compile a list of connected, affiliated and associated entities that might affect the $20 million cap or QADE calculations (Schedule 1 1.9). Record transfer pricing/accounting treatment for intra‑group transactions and prepare justifications where entities have been determined not to be associates (Schedule 1 1.9(b)(ii)).

Assemble the evidentiary package (follow Schedules)

Corporate information: company name, ABN, incorporation state/territory, registered address, directors’ names/addresses and head company ABN if in a consolidated group (Schedule 1 Div 1 items 1.2-1.6, 1.8, 1.4).
Project information: title, platform(s), genre, synopsis, primary purpose, any promotional/advertising or institutional purposes, internet access details, classification and gambling risk disclosures (Schedule 1 Div 2 items 2.1-2.9).
Completion evidence (if applying for completion or porting certificate): evidence of public availability, playable copy or access upon request, and arm’s length contract copies if developed under contract (Schedule 1 2.10).
Financials and QADE: estimated start/finish dates for QADE (Schedule 1 3.1); itemised expenditure statement that totals estimated QADE in Australian dollars, described budget items and locations where expenditure was incurred (Schedule 1 3.3); details of Commonwealth, State or Territory grants/subsidies (Schedule 1 3.2); foreign currency statements translated per section 960‑50(6) of the Act (Schedule 1 3.4).
Takeover scenarios: if the applicant took over development, document outgoing company details and which expenditures are claimed under the transfer provisions (Schedule 1 3.5).
Declaration: prepare the authorised digital declaration that the application and attachments are true and correct, noting it is a taxation statement (Schedule 1 Part B 1.1-1.2).

Lodgement mechanics

Use the Arts Department’s website form and submit electronically to the Arts Secretary as required (s 6(d); s 14(c)). Keep confirmation/receipt as the application is taken to be submitted when the applicant is notified of its receipt (s 6 note; s 14 note).
For provisional applications: ensure the application is complete before lodgement because it cannot be amended after being made (s 15(1)). You may withdraw prior to issuance (s 15(2)).

Interaction with the Board and responding to requests

Be ready to respond to Board requests for additional information within the notification period provided (ss 9 and 17). If you need more time, make a written extension request within the notification period to preserve the right to extend (ss 9(3)-(5), 17(3)-(4)).
If the Board gives you a copy of third‑party information or an independent expert report, respond substantively within the normal 28‑day window or request an extension in writing within that period (ss 8(5)-(7), 16(5)-(7)). Failure to respond allows the Board to proceed without your input (ss 8(10), 16(9)).
Anticipate independent expert scrutiny: ensure internal materials can withstand independent expert review on issues such as attribution of specific items to QADE, whether the applicant is the appropriate entity, and whether the game meets the Act’s “digital game” criteria (ss 8(2)(c), 16(2)(c)).

Record keeping and audit preparation

Retain contemporaneous records supporting QADE itemisation, supplier invoices, contracts, payroll allocations, location of work, currency conversion calculations, grant/subsidy documentation and board/management approvals used to assert that the applicant is primarily responsible for development. The instrument requires detailed QADE descriptions and location breakdown (Schedule 1 3.3) and ties declarations to taxation law (Schedule 1 Part B 1.2).
For foreign currency, keep source documentation supporting translation and conversions used in the foreign currency statement (Schedule 1 3.4).

Post‑decision steps and rights

If a provisional certificate is refused, expect written notice with reasons within 28 days of decision (s 19(2)-(3)).
If issued a certificate and you seek amendment, follow s 11: submit electronically in prescribed form, specify aspects to be amended, give reasons and full supporting documentation, and be prepared to supply further information if requested by the Arts Minister (s 11(1)-(2)). Note time limits on amendments under section 378‑75 of the Act (s 11 note).
If you receive an adverse Arts Minister decision listed in the Part 2 note, consider AAT merits review under section 378‑90 of the Act.

Governance considerations

Ensure the contact person details in the application are accurate and that authorised signatories are identified (Schedule 1 1.10).
If your project involves multiple related entities or is part of an acquisition, take particular care to document the legal and commercial arrangements and to apply section 4(2) (incoming company treated as having performed outgoing company activities) by providing outgoing company details (s 4(2); Schedule 1 3.5).

Practical timing and resourcing

Allocate resources for preparing the application dossier, responding to Board information requests, and potential follow‑up expert analysis. The Board’s procedural windows are generally 28 days for comment and unspecified notification periods for information requests; plan internal deadlines to meet or request extensions in writing within the allowed periods (ss 8(6)-(9), 9(2)-(5), 16(6)-(9), 17(2)-(4)).

Compliance is therefore document‑centric and time‑sensitive: accurate QADE calculation, related‑party disclosure, residency/PE evidence and a coherent audit trail are the linchpins. The Rules place decision authority with the Arts Minister (informed by Board advice) and the Board as gatekeeper for provisional certificates; therefore successful compliance requires both substantive tax documentation and strategic handling of the Board’s procedural interactions.

Income Tax Assessment (Digital Games Tax Offset) Rules 2023

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