A new report from the British organization Tax Watch UK has revealed that Rockstar North, developers of Grand Theft Auto V, haven't paid taxes to the UK government at all over the past 10 years. The report states that although the game is known as the highest-grossing and quickest selling entertainment product of all time, Rockstar North and other British subsidiaries of Take-Two appear to be making almost no profit, resulting in the company not paying any tax. As if that wasn't damning enough, the report also claims that Rockstar North claimed £42 million from a relief subsidy over the past 3 years.
The full report goes into extensive detail on the tax and royalty structure of Take-Two and its subsidiaries, including revealing that in total the management of the companies raked in a whopping $3.4 billion in bonuses over the past decade. The fact that Rockstar North also managed to gain access to the Video Game Tax Relief scheme has been a big focus of the report. The relief scheme was designed to give breaks to smaller companies creating games which could be thought of as 'culturally British'. Regardless of how it has been done Tax Watch are claiming that Rockstar North makes up for 19% of all video game tax credit in the UK, which is quite a staggeringly huge number.
So far the report has been making the rounds on Twitter, with many people and news outlets commenting on the high level of tax avoidance alleged by Tax Watch UK. Some users were outraged while others just took the opportunity to laugh at Rockstar's expense. As of yet, no one at Rockstar or Take-Two has responded to the release of the report, which has come out not long after it was revealed that over 4 million people in the UK are in extreme poverty.
That said, what Take-Two and Rockstar are doing isn't unique to them. Activision Blizzard minimizes taxes where it sells and develops games by having a Dutch subsidiary registered as the owner of their IP and license it out to other branches and take advantage of a loophole where effectively the US financial laws think they are paying in the Netherlands, while the Netherlands laws think they are paying to the US. Sadly, it is all too common for major international corporations to avoid taxes with dodges like this.
What do you think of the new Tax Watch UK report? Do you think that Rockstar and Take-Two should do more to make sure they're paying the right tax? Let us know what you think in the comments below.