Italy’s ‘Beckham Law’ Tax Explained

On June 27th, 2019, a bill known as the Decreto
Crescita, or the Growth Decree in English, passed through Italy’s Senate. The purpose
of the legislation is to boost the stuttering Italian economy, but it could also have a
major impact on football and on the ability of Serie A clubs to attract the world’s
best players and coaches because of a new tax break. The legislation is being compared to the ‘Beckham
Law’, a tax decree that was signed into Spanish law in 2005 and that provided tax
breaks for rich foreign workers such as footballers. Given that David Beckham was one of the first
players to benefit from the law during his time at Real Madrid, his name became forever
associated with the measure. From 2005 until an amendment in 2010, this
tax break helped LaLiga clubs to afford some of the most lucrative contracts in football.
Now, Serie A clubs should similarly benefit thanks to Article 5 of the Decreto Crescita.
The aim of this section of the bill is the “rientro dei cervelli”, meaning “the
return of the brains”, as the Italian government is trying to stop the brain
drain that has hurt the country’s economy by bringing skilled workers back to Italy. In order to do this, a five-year tax discount
is being offered to anyone who has been resident outside of Italy for the previous two years
and who moves to Italy for a minimum of two years to work. It doesn’t matter whether
this person is Italian or non-Italian. It applies to all. It would apply, therefore,
to someone like new Roma coach Paulo Fonseca, who has been resident in Ukraine for the past
two years. It would not, though, apply to someone like new Juventus coach Maurizio Sarri,
who only spent one year outside of Italy in England as coach of Chelsea. The new law comes into force at the beginning
of 2020, which means that it isn’t in effect for the first half of the
2019/20 season. From 2020 onwards, though, players and coaches can benefit from the tax
break as long as they commit to staying for two years minimum. Anyone
who benefits from the tax discount, but then leaves Italy before staying for the two years
would have to pay back the deducted amount. For the general population, those who are
eligible for the tax break do not have to pay any income tax on the first 70% of their
income or on the first 90% of their income for those moving to regions in the south.
However, it’s slightly different when it comes to footballers. The Italian government amended the first draft
of the law to limit the value for footballers to 50% and to remove the southern regions’
extra benefit. It doesn’t matter if a player moves to a northern club like Juventus or
to a southern club like Napoli. Their percentage of tax-free income is 50%. This, though, is
still a significant discount for the clubs. Imagine Roma want to offer a player an after-tax
salary of 10 million euros. Previously, the club would have had to pay 17.5 million euros
because the entire 17.5 million euros would have been taxed at the highest Italian income
tax rate of 43%, leaving 10 million euros after 7.5 million euros was paid to the taxman. Under the new situation, it would only cost
Roma 12.7 million euros because only 50% of this would be taxed, working out at a payment
of 2.7 million euros to the taxman. This is a saving of 4.8 million euros. Multiply that
across several years and several players and the benefit is evident A further 0.5% tax will also have to be paid
to a central fund by footballers benefitting from this tax break, with this money going
to help youth development. Plus, there are some other minor taxes such as regional taxes
that may have to be paid. Overall, though, this is a great advantage for Italian football,
as Serie A clubs can either pay the same salaries at a lower cost or they can now afford salaries
and attract players or coaches who would have otherwise been unattainable. So just how significant can this ‘Beckham
Law’ be for Italy? “The rule can significantly help the growth of our football, both in terms
of value and competitiveness,” sports lawyer Carlo Rombolà told Calcio e Fianza. “This
could potentially start a good cycle to bring championship-calibre players to Serie A,”
stated an editorial in La Gazzetta dello Sport. There could, however, be some negative side
effects of Italy’s ‘Beckham Law’. The fact that it only applies to players who have
been resident outside of Italy for the previous two years means that Serie A clubs might target
an increasing number of foreign players. The discount applies to Italians moving home as
well, but logically there are far fewer Italians abroad than foreign players abroad and this
could damage the prospects of young Italians coming through.
There is also concern that this decree might actually lead to a reduction in tax revenues.
The Italian government has insisted that this will not be the case, but there are others
who believe the government is handing out tax reductions to many people who would have
come to Italy anyway. Finally, there is some anger at the fact that
rich players and coaches and football clubs are the ones who stand to benefit. Even though
the Italian government reduced the percentage discount for football professionals, the fact
they didn’t completely remove this tax break for footballers suggests that they are comfortable
with the football industry benefitting from it. It remains to be seen if Serie A really will
be able to propel itself into a new golden era thanks to this ‘Beckham Law’. The
very best in the world used to call Italy home, from Van Basten to Ronaldo to Shevchenko
to Kaka. Perhaps Serie A will have the cream of the crop once again.

Author Since: Mar 11, 2019

  1. By far the best football channel on YouTube. Shits all over shite channels like Copa 90 and Football Daily

  2. Tifo can you address how a players salary went up that high, It may sound dumb I know but Id like to see your Poimt of view in regards to that matter assuming it has history rather than just "hes good pay him Millions"

  3. When the Balotelli Law is a tax thing, rather than a law against doing a burnout naked in your Lamborghini having a shaved goat in the passenger seat.

  4. What would happen if all top leagues in europe unify the criterion about taxes, would it be a zero sum game strategy?
    I believe in some way it could be, but the rest of the economy context on all these countries would apply too…
    Too broad to predict.
    But definitely would be an interesting condition.

  5. Not only Italian football but football in general would benefit and feel more normal with both Milan teams being as strong as Juventus which would make Serie A really exciting to have the 'Big triads' all equally competing for the scudetto and the champions league.

  6. Yesterday I saw Cristiano Ronaldo (€31 million) at a homeless kitchen, the top players really need our help.

  7. another implication that wasn’t mention is that it will encourage young Italians to go abroad early in their careers to come back to Italy later, a 2-year loan would technically incorporate this exception if done properly

  8. Great video, but it is crèscita, not crescíta! To improve your channel, you should fix the pronunciation of the foreign world! 😉

  9. Less tax money = less funding for social programs. It's kind of old now. Everybody knows what it's about. Those football clubs aren't gonna build hospitals, roads, schools.

  10. I would say let’s pray this fixes AC Milan’s problems, but I think them tearing down the San Siri is basically telling the whole story. Which is, AC Milan’s story has finally come to a close

  11. Italian player who has been at Italian club his whole life, earns €10k per week. New signing who is also on €10k per week but gets more paid into his account due to paying less tax. That's going to cause some issues is it not? " Why do I have to pay more tax than this guy when we are on the same salary?"

  12. "fuck everyone who's paying their fair share of taxes. I'm going to suck footballers cock so that they're more inclined to stay"

    Sorry but that sounds much like a prostitute. Sure the quality of football will increase but you've got to see that it's not the only and most important thing in the world. It's a huge fuck you to anybody who believes in egalitarianism under law.

  13. I don’t trust this idea at all as we can see that this ‘Backham law’ eventually got benefits only for the 2 main Spanish clubs as F. C. Barcelona and Real Madrid. Creating an enormous gap with the rest of the league. All the other clubs have never been competitive in La Liga.
    But it put them dominantly and absolutely competitive in the European football scene, that’s true.

    It doesn’t mean it will be the same for the Italian clubs. But it will surely increase big players to the Italian Serie while young Italian players will struggle to play or compete with them again.

    Seeing it from ‘outside’ the most frustrating thing is that they have reduced taxes and got benefits to a rich and wealthy business while the hard working class still struggles to get more concrete benefits and welfare support for schools, Universities, science research, families etc. As always in Italy they never get attention to them at all.

  14. The only Football League which Plays fair is the Bundesliga… All ihrer cheat either through tax laws or rich Investors…. Disgusting

  15. Another great video. But, surely someone has at least thought of it by now, when can we see a Busby Babes/Duncan Edwards video?

  16. You pay income tax, then you have to pay council tax with the remainder of your wage. Then there’s the car tax don’t forget and then if you go in a shop there’s VAT. Fuel is mainly tax then you save for a pension and they tax that. Then there’s even fucking pasty tax in Greggs , also sugar tax. We get rinsed by the system I don’t blame anyone who tries to bend the rules to evade paying it.

  17. In other words the opposite of what Spain does, it should he called The Cristiano Law because i'm more than sure the increasing rates of Spanish taxes was a reason why he left

  18. Terrible thing, because after those 5 years of tax reduction the average salary in serie A will be grown, since for club is easier to spend more, and then clubs will struggle to keep the Rhythm oh so high salaries

  19. I know you haven't done a meet the owners episode in awhile but I would very much like to know who owns Borussia dortmund which is famous for its stadium turn out

  20. Think they earn enough don’t they how much do they really need to earn needs capping some these clubs got more money then countries

  21. Here before the 2018/19 juve team is busted for corruption….. AGAIN!!

    Cut the crap! SeriA is as corrupt as it gets, dead league and so the Italian government hides juves debt and even assists to help but cr7 because otherwise NO-One would ever mention the Italian league.
    Shame this channel couldn't be hone$t with u all.

  22. meh, most Italian clubs (including my beloved Roma) are so mismanaged (and let's be honest, corrupt) that I can't see them competing regularly at the European level unless something significant changes. Great vid tho.

  23. Your inability to pronounce Italian words continues to astound me. Right off the bat, Cray-sheetah instead of creh-shitah for crescita. Chey-verlee instead of Cher-velly (rhymes with the English belly) for Cervelli. Keh-leecheeo ee phenzh (didn’t really make an effort on the last one did ya?) instead of cal-chow eh fin-an-zah (rhymes with bonanza) for Calcio e Finanza.

  24. Maybe to get around the fact it may stunt growth of young italian players, you just loan them out for two years then bring them back?

  25. Money goes to youth development that 9 out of 10 times won't ever touch a serie a pitch because bringing in foreign, ready players gives more benefits.
    And yet they complain about the national team being trash. I wonder why.

  26. This should help bring in talent, but once the economy is thriving it is key for taxes on high earners to remain strict enough to battle wealth inequality.

  27. Excellent, excellent video. I appreciate the fact that you venture out so far out from traditional football analysis and provide food for thought regarding underlying, yet important aspects of the game.

  28. Wouldnt udinese and Watford benefit from this? Udinese 'sell' their players to Watford for 2 years then 'rebuy' them and get that sweet juicy tax free income

  29. This is great for Italy….for two years at a time. And then the player will request a transfer right when he might be finally settled in to the system and ready to perform at the highest level.
    Sounds like a great incentive to sign a two year contract and f*ck off.

  30. Wow. I am shocked I am only hearing about this now. I'd expect a thrice-a-week mass bitching on imgur. Or maybe the internetians only care when it's about USA.

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