Recently, Italy's preferential tax policy "Growth Decree" has been canceled, which has become the focus of attention in Italian football. The abolition of the growth decree means that the policy weapon of introducing high-level foreign aid is gone!
The Growth Decree is a temporary regulation introduced in 2019 by Italy in order to attract foreign or foreign talents to work in Italy. Outstanding talents in various industries can enjoy preferential tax policies of 50%-70%, and some economically underdeveloped areas can enjoy up to 90% tax reduction. Of course, this decree is valid for the first three years of arrival in Italy. In the football industry, the maximum reduction is 50%.
The introduction of the policy is considered a lifesaver for the revival of Italian football. For Italian football, which has been in a trough for a long time, the introduction of high-level foreign players will greatly improve the competitiveness of Serie A and other leagues. Because of the tax breaks, clubs have more salary space to pay their players, and players can get more after-tax wages.
For example, a player earns €1 million a year after tax and €2 million before tax. With this policy, the club can also give players an annual salary of 2 million euros before tax, and the annual salary of players after tax can exceed 1.3 million euros.
As a result, this policy has helped Serie A teams to convince a number of high-level foreign players to join. For example, Belgian star Lukaku, French star Thuram Jr. and others. Players such as Rafael Leao, Pavard, Paredes, Rabiot, Christian Pulisic and Osimhen are also beneficiaries of this policy.
Of course, taking into account the pros and cons of the development of football, the decree has been adjusted in the football industry to a certain extent, narrowing the scope of preferential policies: only foreign footballers who are at least 20 years old and earn 1 million euros a year can enjoy the tax deductions provided for in this decree.
The effects of the tax incentives were soon apparent. Clubs such as Juventus, Milan, Napoli and Roma have been greatly improved in European competition, and three teams even reached the European final last season. According to statistics, 64 of the 129 transactions in the last transfer window used tax incentives, helping Serie A teams save nearly 1400 million euros. With the revocation of this decree, Serie A teams will not be able to receive discounts, which will increase the financial burden on the club and affect the club's recruitment in the new transfer window.
In this regard, the CEO of AC Milan FC Flani, who has been greatly affected by the cancellation of the decree, expressed concern, saying that the Milan club has been able to achieve profitability again after 17 years, largely thanks to the excellent sports results after the implementation of the decree. Once the growth mandate is lifted, Italian football will be ruined and will not be able to compete with other leagues such as the Premier League in terms of economy. Neither TV revenues nor stadium revenues can compete with other leagues, and the only lever to compete with other European leagues is the Growth Act. In his opinion, the abolition of the growth decree seems crazy at the level of the national economy.
However, the Italian Players' Association has expressed support for the repeal of the growth decree. "We are very pleased to learn of the repeal of the Growth Decree, which penalizes the entire Italian football sport with the provisions on foreign aid," said the President of Carcano. The decree was cancelled and Italian and foreign players will be able to compete on an equal footing at the same starting line. It protects the development of our football world and the future of the national team. ”
Regardless, the cancellation of the growth mandate is already a fact. Coincidentally, Spain** also promulgated preferential tax policies in 2005 at the suggestion of Real Madrid President Florentino, which was known as the "Beckham Act". For foreign talents, the tax rate is only 24% instead of 45% for nationals. Those who have worked in Spain for more than 6 years and have an annual salary of more than 600,000 yuan can enjoy this preferential tax rate.
This policy has directly contributed to the development of Spanish football. After the implementation of the law, the Spanish national team won the tournament three times in a row. In terms of clubs, Real Madrid, Barcelona, Atletico Madrid, Sevilla and other clubs have won the Champions League, the European League and the Club World Cup for many times. However, the bill is only provisional and will end on 31 December 2009.
The fate of the Beckham Act is also inevitable for the Italian Growth Act, because football is second only to national development. If Italian football is to develop further and remain competitive, it needs to find a new way.