Watchdog Slams Lead Grand Theft Auto Studio For Avoiding Corporate Taxes In The UK

Watchdog Slams Lead Grand Theft Auto Studio For Avoiding Corporate Taxes In The UK
Screenshot: Rockstar

Rockstar North has used tax programs and other smart accounting to avoid paying corporate taxes in the UK for years, even while its most successful game Grand Theft Auto V has sold millions of copies and made billions of dollars.

That situation is detailed in public tax filings for Rockstar North, Ltd. and highlighted in a searing report released this weekend by a group called Tax Watch, which describes itself as an “investigative think tank” and has previously gone after Google and Starbucks for supposed tax avoidance.

“This is a drive-by assault on the British taxpayer and corporate welfare scrounging at its very worst,” the group’s director George Turner said in a press release promoting the report over the weekend. A representative from Rockstar declined to comment

Rockstar Games is headquartered in New York City and has studios around the world, but for much of the mega-studio’s existence, the bulk of the work making the GTA games has been done in Scotland at Rockstar North, which functions as its own company for financial purposes. In 2018, Rockstar North reported profits of £8,300,782, or just over $14.6 million).

All the while, it paid nothing in UK corporate taxes, thanks in large part to claiming more than £19 million (or $33.6 million) in tax credit through the UK’s Video Game Tax Relief program, which Rockstar qualified for in 2016. That government program was designed to financially support British games and requires them to contain British themes and/or be crafted by a lot of British people, the latter of which probably qualified Rockstar.

The Tax Watch group calls the situation “absurd,” saying the program was intended to help smaller game makers and not spare one of the most successful game companies in history from paying corporate tax. They are especially scornful of the accounting that seems to cast creating GTA as a barely-profitable enterprise for Rockstar North, as U.S.-based publisher Take-Two claims most of the revenue for itself.

“Take-Two appears to believe that it is reasonable that close to 100% of the profit should flow to their US based parent companies and senior management, whilst almost no profit flows back to the UK companies involved in either making or selling the game,” the Taxwatch group says in its conclusions. “We do not believe that this division of profits can be justified under the so-called ‘arm’s length’ standard found in international tax law.” The group urges the UK government to reconsider its tax relief plan.

Rockstar North presumably has paid taxes on employee income and Value Added Tax, Taxwatch director Turner told Kotaku, but he noted that those tax bills are not publicly available.

As for Take-Two, which also publishes the NBA 2K series, Civilisation, and more, the company reported a profit of $US173 million ($251 million) in 2018. That included a nearly $US37 million ($53.6 million) tax benefit.


  • I dont know why governments havent been more aggressive towards microtransactions and loot boxes… most of the money is offshored straight into low tax banking havens or filtered through Sony, Apple and Microsoft stores that pay like 5 cents tobthe dolkar in taxes due to blatant accounting rorts.

    Why defend an industry that isnt circulating money in the economy they feed upon?

  • There are constantly people crying about companies using tax law to avoid paying lots of tax. Completely legally.

    We’d be stupid to not claim deductibles, too.

    If it’s not right, you need to change the law. The whole point of most businesses is to maximise value to their shareholders and if you don’t have to pay something, don’t.

    • And that seems to be what the Taxwatch group seems to be doing. From the article: “The group urges the UK government to reconsider its tax relief plan”.

      Of course, without fixing the international transfer pricing issue, Rockstar Games could just ratchet down Rockstar North’s profit to zero and continue paying no UK company tax.

    • No one’s saying they are doing anything illegal.

      It’s one thing for a business to use the tax law to claim tax credits against losses to help get back ahead [or, in this case, use a local tax exemption to help encourage local development]. It’s another to continually claim zero profits while your business expands to one of the largest in the industry.

      Rockstar [and take-two] are one of the most profitable companies in the world. Is the way they minimise tax legal? Yes, absolutely. Is it socially responsible? Absolutely not.

      Legal doesn’t mean right, or socially acceptable. I don’t think there’s anything wrong with calling out companies on morally dubious decisions.

      • No, I am saying they are doing something illegal. Its just a nightmare to prove it, the tax agencies try to go after them but its a tough process that can be stalled for years.

        Immediately off-shoring money at the point of purchase to go immediately into a bank outside of the jurisdiction of the country they earned. I can’t leave the country or deposit more than $10,000 in my bank without being suspected of being a criminal or a terrorist… and they are funnelling millions a day in micro-transactions virtually to the bank of their choosing and not being held accountable and audit-able cause they found the sketchiest loophole in a one particular countries banking laws that says they can do it.

        The fact that governments are willing to not take action on loot boxes and micro transactions is baffling, cause they have no economic benefit to Australia or UK, cause the only country having any economic benefit from these dodgy deals is the country which is home to their bank and the shareholders trading their shares (cause companies don’t pay dividends anymore cause the Board takes all the money in their pay cheques)!

      • But being right and socially acceptable are often at odds with the main mission of a business, value for shareholders. If they could, they would pay no tax anywhere ever but we have laws mandating otherwise. Maybe they need to be adjusted somewhat.

        I’m going to by minimising my tax as much as possible also as I expect everyone is.

  • It’s way past time that these multi-billion dollar “triple-AEYYY” publisher scumbags got called out on using tax havens and number-fiddling accountancy to pay no tax at all on the obscene amounts of money they rake in, they claim disgustingly huge tax rebates on the tax they DON’T pay at the expense of the public. It’s the biggest scam in history, a blatant crime the greedy trash only keep getting away with because the law made by rich people doesn’t see it as a crime.

  • I love how they complain that the producer taking all the money is a tax dodge. No, sorry, that’s how the game industry actually works. The producer takes the lions share of the profits and the developer makes enough to make the next game. It’s a crappy situation, but it really is how it works.

    • In this case, the producer and developer have the same shareholders. So it isn’t a case of two companies individually attempting to maximise their own profit. Rockstar North is never going to say “Rockstar Games doesn’t pay us enough to make GTA. Let’s make games for Activision instead”.

      Rather, the two companies will work out how much money it makes sense to transfer between them to maximise the combined profit. That’s quite different.

  • What’s this? Another big company avoiding taxes? Colour me surprised.

    Nothing will happen. Because these big companies give too many donations to both sides of politics. Resulting in no action or limp-wristed tax changes designed to placate the voters while actually doing nothing.

    Welcome to rampant capitalism.

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