CM: The background on Ibrahimovic’s renewal – tax relief and a win-win deal for all

By Oliver Fisher -

AC Milan were able to eventually secure the renewal of Zlatan Ibrahimovic due to a curious detail in his contract, according to a report.

Ibrahimovic is back after testing positive for Coronavirus and in view of Saturday’s derby – a game he is expected to start – it must be remembered that for a while it wasn’t even certain that he would be a Milan player this season.

It was a long and intense negotiation between Milan and agent Mino Raiola, despite the fact all the major news outlets reported that the Swede wanted to return for one more season. Eventually he signed until June 2021 as the Rossoneri backed down and gave him the €6m net he demanded, but they had a reason for doing so.

Milan and Ibrahimovic have in fact signed an agreement that could be called a win-win. Ibra gets the money he wanted, while Milan will pay only 50% tax rather than 100% (so €9m gross as opposed to €12m) thanks to a tax relief initiative launched by the government.

However, it must be noted that the tax address must have been maintained on Italian soil for at least two years. Ibra signed a contract for one year and six months for the second part of 2019-20, meaning he is still six months short.

Nonetheless, the 39-year-old has pledged to maintain tax residence in Italy until January 2022, so Milan will be able to save the €3m in tax payments.

Tags AC Milan Zlatan Ibrahimovic