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.
