The Italian government have decided to scrap the Growth Decree tax relief scheme and it will have a knock-on impact on clubs like AC Milan.
As SportMediaset and La Gazzetta dello Sport report, the decision has been made to bring the Growth Decree to an end, but it will not just apply from the next transfer window but also to signings made from 1 July 2023 onwards.
Given that Milan made 10 signings during the summer mercato, it means they will be one of the clubs who feels the heaviest impact of the decision to scrap the scheme, which has been changed as follows:
“Employed or self-employed workers who transfer their tax residence to Italy will be granted, from 2024, a new subsidised regime for a maximum of 5 years.
“They will be able to benefit from a 50 percent tax reduction, within a subsidised income limit equal to to 600,000 euros, workers in possession of the high qualification or specialisation requirements who do not appear to have already been resident in our country in the three tax periods prior to obtaining residency.”
There are some who believe that the Growth Decree was harming Italian football because it was encouraging the signing of players from abroad, given that it applied to those coming from another country to live in Italy.
Players who were not residents in Italy in the previous two years before their purchase and who then remained in Italy for at least two years after their signing saw a tax on the gross of the salary at 25% instead of 45%.
Now, clubs will have to change the way they conduct transfer business to cater for the fact they will no longer be able to rely on the Growth Decree.
I sincerely hope that the Italian government will change its mind, Italian club football went on an upward trajectory after they introduced that rule, it is not in anyone’s interest to suffer again in relation to Europe
Why, because they don’t want to give tax reliefs to clubs that spin half a billion of € a year and pay wages that are thousand times higher than people from Italy that actually do something useful?
The whole idea was a bit stupid, in the UK, they also pay 45% on most of the wages, anything over 150 thousand I think. They didn’t get their league up by removing tax from the clubs or players, it is a nonsense idea.
It is how id**ts “solve” problems.
My friend, with all due respect, you cannot compare football and a normal job, if you have the best doctors in the world in your country they are cannot raise your reputation as a success of the club at the international level, but I still believe that the clubs and the government will find some agreement because is in the interest of both parties
LOL, don’t be ridiculous. Yes, the reputation of a country is raised by having successful clubs, not economy. USA is really considered a great country because of their sport clubs, not economy. What are you talking about? It is nonsense, 100% nonsense. Players in England pay 45% tax, same as in Italy.
Stupid idea, glad they removed it. You obviously do not understand more than a few things, but Premier league did NOT BECOME THE TOP LEAGUE BY REMOVING TAX. But by upgrading the infrastructure and making it more attractive for fans in that way. Not by removing tax for foreign players.
totalsportal(.)com/money/tax-on-footballers-salaries/
It’s not a problem for them, and you wondered why it is like that, sponsorship contracts, top stadiums, the league brand, I’m not saying that they don’t cancel tax breaks, but let them at least help with the stadiums, how many stadiums there are in Italy at the highest level 3-4 and in England 40-50, you can see the athletic tracks around the stadium only in the Balkans and in Italy, and when Milan and Inter want to build a new stadium, there are problems with paperwork, the problem is not the tax, but the problem is that there is no state aid for the clubs
Yes, I agree. But clubs could have also come up with this and pushed for it, they are not really without blame. This whole decree was extremely stupid, they should have subsidized stadiums and infrastructure, allowed some state backed loans to fund building them and tried to get as many clubs to do it in a shorter period. Premier League success is built on that.
Yeah but the problem with that rule, prevent Ac Milan to i’vesr in Italian talent, it’s so weird to see an foreign Ac Milan, whilst the tax apply on player is equivalent at 85% of the Wage players, with the growth decree it turns in 35%.
They have to get a discount on the tax payed for the Serie A players, it’s a nonsense, it prevents us to have some azzuri players, La Nazionale doesn’t contain any Rossoneri players it’s a shame
Where will clubs in a country that won 4 World Cups get players from if they can’t get them from abroad?
Why should we buy in Italy, the prices are still high, we might not get a discount for buying from abroad but it is still better, especially for the types of players we need.
One would expect hotshot managers to know about this coming. Or?
I’m convinced the Italian government hates calcio
Why? 😀 And the government in England hates football because the tax % is the same or really similar there? ??
No, it’s not just this one situation. It’s a number of situations throughout the years. There are constant legal issues and investigations and draconian punishments. This goes for the FIGC too. Compare their punishments to those handed out by the FA or La Liga (not saying they’re unwarranted, just extreme in comparison).
Oliver, just a suggestion, you could have added how much will Milan lose with this decision, since you did an article of how much the gross wages are and how much will they save just recently.
Considering Italy’s nationalistic government, we can expect “due stranieri” scheme back.
Good.
Now they just need to limit clubs to signing 3 players in the summer and 1 in winter, introduce a squad size limit of 25, limit loans to 1 per career with a minimum duration of 1 year…..and we might get some stability back.
You didn’t. You did? And out loud?😱
Scraping growth decree for now is just not fair for Italian clubs which have worst infrastructures and incomes comparing with other Europe leagues.
Well, scraping growth decree after 3-5 years would be much better, as Milan, Inter and Juve all have own stadium.
Juventus built their stadium 12 years ago. The government should have subsidized that, building new stadiums and infrastructure around them, not tax relief on wages. Useless.
It was a useful loophole while it lasted.
However no one can argue that the highest paid people in Italy shouldn’t pay the highest rate of tax.
Also something I feel needs to be said, It is the employee who pay’s income tax, not the employer!
So sure you can work in Saudi or wherever and pay virtually no tax on your income or you choose to work in a functioning western economy where you pay tax at the appropriate rate.
Well, question is if anyone should pay 45% tax, Europe has become a bit overly social, limiting tax to around a 1/3 of ones income wouldn’t be a bad move in general, 30-35% is still plenty for the state.
Most people who earn over a million can use wage saving tactics anyway if you hit them with 45% tax, athletes maybe less than other people, although tennis players often have a domicile in Monaco for example.
It’s really irresponsible to scrap the growth decree so quickly without any kind of process and warning. Typical Italian mess to be honest. At least allow make it so that current signings aren’t affected or maybe give a periode og 3 years before changing stuff. Nonetheless, this is probably gonna end the upward trajectory that Italian football has been having the last couple of years. Sad
Personally im fine with this as i always thought it distorting competition and even wondered how it was even allowed to have such rule within the eu,
It will give better incentive to italian clubs to actually field italians which in the longer run also will help italy’s international team.
A win win situation as i see it.
It’s just means Italian clubs will have to pay more – or should I say the correct amount in salary – as other clubs in Europe do. Milan went for foreign players because they were better than Italian players AND because they saved on salaries. If the foreign talent is still better and now
the salaries will be the same – shouldn’t impact the decisions – as better talent for the same cost is better talent. So I don’t think it will suddenly cause an influx of us buying Italian players. Perhaps at smaller clubs yea. But I don’t think it will cause us or other big clubs to focus just on Italians.
This is not good for Ac Milan final bill.
This is only good for fresh players who would accept to play for low salary.
But we can se how without experience players who are obviously on higher salary, you can’t gain result.
Last year we would finish fifth if there is no penalty against Juventus.
This year we have more wins thankfully to Pulisic, and for now Okafor, which are paid more and scored more than our last year attack and right flank together.
that point reduction narrative has gone stale a long time ago and it can easily be argued that juventus wouldnt have had the same players had they not fiddeled with their finances and potentially have had less points without an as strong team they have at their disposal.
Yes, but most of their issues were because they signed Ronaldo who was paid 31M€ per year. Basically over a 3rd of the total Milan team wages now. When COVID came and income went down that is when they started to cheat to keep the team.
Sure but still their cheating has given them room to aquirre players and whos to say if they would still have been able to afford players like vlahovic and chiesa if they hadn’t done it and that would certainly also affect their onfield results.
Yes exactly!
I find it incredibly annoying that a club in a financial meltdown like Barca can afford to poach one of our best players by offering more wages. (not to mention signing players like Felix).
In Juve’s case they signed Vlahovic and Chiesa for big money in recent years, by fiddling the books.
Again these are 2 players that Milan would love to have.
Inter are able to sign Thuram and they are almost bankrupt!
We need a level playing field.
Enough financial doping
Financial doping is absolutely the right word to describe it and i for one would love us to have both chiesa and vlahovic in our team, Barca still fight with its economy to my knowledge but i think one of the main reasons they have been able to act in the market is that they sold their advertisement rights for a long duration of time which could just just delay their worries.
This is complete non-sense to make a decision retroactive. I am OK with the idea of taking down Growth Decree, but give clubs some time! Don’t be a-holes. And like some of you already stated, this will put an stop on italians making progress at Europe level…
I agree on the retroactive part but besides of that i see no reason why some players should be favoured upon others as it was an unfair rule as i see it and with it gone italian clubs will have better incentive to develope italian players,
I feel like the last competent Italian politician died on the ides of March
seriously you would like cesar back 😀
Best thing I’ve heard in a long time but now I hear it won’t apply to footballers… I hope that’s not true. Growth decree is awful. And the weaker nazionale is a direct result of it.