One of the key factors that perhaps many don’t know about on the mercato is the so-called Growth Decree. It’s a very beneficial tax relief in Italy and down below we explain how it helps AC Milan.
Milan are expected to make some reinforcements this summer but the budget won’t be €100m as was initially suggested by Gazzetta Dello Sport. But that was clear from the start, as we explained in a longer piece on our substack (read here).
The Rossoneri have a Settlement Agreement with UEFA that they must adhere to, and thus the costs on the balance sheet simply cannot be too high. One thing that helps with lowering the costs is the Growth Decree.
It’s a tax relief in Italy that allows Milan to pay less tax for players arriving from abroad. Instead of nearly 50% in tax, which would mean a €3m per year contract actually costs the club €5.55m per year, the Rossoneri are allowed to pay 31% in tax instead.
To use the imminent signing of Daichi Kamada as an example, his €3m-per-year deal costs Milan €3.93m instead of €5.55m. The Growth Decree was almost scrapped by the government but in the end, they changed the rules to the following: 1) The player in question must be above 20 years and b) the salary must be over €500k to be eligible.
It also makes it more unattractive to buy talented players from Serie A, though. Funneling money out of the league. Double-edged sword. Please don’t delete my comment again or at least provide a reason. 🙁
Tbh the teams itself are the making italians unattractive, look the prices for scalvini, mancini or scamacca. The moment a youngsters is given a chance and plays good he becomes as expensive as english player without a quarter of the money in serie a
Surprisingly they provided a reason one time for a deletion when i asked for one here. To me it really wasn’t sufficient but it is what it is
This. Those that whined about Milan didn’t give just big salary to attract players need to understand this.
For example, those that want Dybala… we will need to give him €7m wage + 6m tax + signing bonus + agent bonus. It’s 13m per year, and add signing+agent bonus, it will easily reach €23m in first season and €13m in all remaining contract years. It’s different from Asensio where tax decree still apply (if he signed to us) but we still need to pay him €7m + €2.1m in the first year plus signing and agent bonus.
So there’s a lot a club need to consider even when signing ‘free’ players. Maybe Dybala still worth it but again he won’t have any resale value after his contract ends.
dybala also has a release clause set at 20 mil to my knowledge which worsens it further,
And judging from the commentaries from various artciles on SM, some these “experts” even dared to claim that they can do a “better job” as Milan’s director than Maldini & Massara LOL.
This is the worst thing for italian football. The more this continues the more the national team will suffer because of the economics of bringing foreign players in. It’s football genocide for Italy. So dumb.