The Video Game Industry in the EU: Business Model and International Taxation in The CEE Region
Rían Elizabeth RAGNARSSON
https://doi.org/10.18267/pr.2026.vol.2587.28
Abstract: The European video game industry relies heavily on creative labor, with substantial work performed in Central and Eastern Europe (CEE). Taxable income from creative activities is often allocated to jurisdictions where intellectual property (IP) is legally owned rather than where artistic value is created. This paper examines how international tax rules, transfer pricing practices, and IP-based business models shape profit allocation in the EU video game industry, with particular focus on CEE economies. The study employs comparative legal and tax analysis of OECD and EU frameworks, supported by secondary industry data and a hypothetical case study. Findings suggest that current OECD/EU transfer pricing frameworks may inadequately capture value created by creative labor in IP-intensive industries, systematically favoring jurisdictions where IP is legally owned over those where it is developed. The paper concludes with policy recommendations for CEE countries and EU-level reforms aimed at aligning taxation with economic substance and value creation.
Keywords: video game industry, transfer pricing, intellectual property taxation, creative labor, Central and Eastern Europe, Base Erosion and Profit Shifting
JEL Classification codes: H25, H26, F23
Fulltext: PDF
Published by: Prague University of Economics and Business, Oeconomica Publishing House
Year of publication: 2026
Online publication date: 20 May 2026
Copyright: Authors of the papers
ISBN 978-80-245-2587-7
ISSN 2453-6113
Pages 338-346