Why the overruling of the Growth Decree is bad news for Serie A clubs and the impact on Milan

By Oliver Fisher -

Recently, the Revenue Agency in Italy has published a document in which it explains that the reduced taxation provided for by the Growth Decree of 2019 for sportspeople is not applicable for the time being.

What does this mean? Well, the Italian government brought a motion in their legislation to withdraw the growth decree rule. This means that for non-Italian players signed after 2019 August, there will be no 50% tax reduction as announced earlier.

Every country has an income tax, and they have varying tax % levied on the person’s income. In Italy for super rich people the tax is 50%. Salaries are defined as gross salary and net salary, with gross being salary a player will earn plus tax. Gross salary is the cost to the company of keeping the player, net salary is the amount the player gets in his bank account

So, for example, Zlatan Ibrahimovic earns €7m net per season. Therefore the cost to the club is €7m x 2 = €14m. Last year a rule came that if a foreign player signed in the August 2019 transfer window (or after) and stays for two years or more, the tax will be reduced to 25%

So for Ibra the salary would be cut to €7 x 1.7 = €11.5m. Effectively, Milan would have saved €3.5m but the new rule plans to stop this benefit to players.

According to il Corriere della Sera (via MilanNews) this morning, Milan could lose about €7-8million for this season alone because of it, based on calculations.

Tags AC Milan