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Over the last few years the Italian league has been in decline. Gone are the days of the all powerful AC Milan challenging for the Champions League. The Italian league used to be the league to play in. I noticed that the Italian clubs were more prominent in the market this summer and right now actually. I even heard today that the Old Lady Juventus had put in a bid for Neymar. Inter have signed Lukaku and Sanchez from United. They are rumoured to be picking up 9 million of his wage bill while United pay the 6 million balance. We have Aaron Ramsey heading to Juventus and Chris Smalling was loaned to Roma just last week. Darmian has signed for Parma. In total 16 players from England have ended up in Italy this year which is a massive increase on last year. But even more intriguing is these are all big names. I was curious to know the reason. Yes clubs like Napoli, Roma, Inter Milan and Juventus are still European heavyweights who can attract top talent. The weather is great, the food is great and the women are unreal. But that can't be it. And it isn't.
Ladies and Gentlemen announcing Law 91.
Law 91 is a law passed to drive foreign investment in Italy. It is a law made to attract high net worth individuals to Italy. So how does this Law work? Football is huge in Italy and it is basically a law that gives tax breaks to footballers for coming down and playing with Italian clubs. Players will be exempt from paying 50% of tax on their wages. A player earning 20 million will only need to pay tax on 10 million. If a large number of players are attracted to Italy then it will increase the taxes coming and ultimately increase income revenue. The tax comes into play this January so clubs are investing heavily in this transfer window so they can avail of this law. So the question I asked is how do the clubs save if the players are getting tax breaks??
Italian employers pay their workers in net terms unlike the UK and Ireland. The burden of tax is on the employer and is paid in gross terms so in Italy the clubs can offer players higher wages as it does not cost them as much as the clubs in the UK and Ireland. If you look at Aaron Ramseys wages at Juventus. €400k a week. No wonder he is heading down there.
Law 91 is not the only tax concession that is on offer. A regulation was published last year where if a resident pays 100k of tax as a flat rate then all tax on foreign sourced income will be waived. It is a major reason that some players are signing for Italian clubs. Image rights is a huge reason for Ronaldo to go down to Italy to play. 100k is peanuts to what he would of had to pay in Spain. Footballers have short careers and maybe things are looking up for the Italian League.
Goooooooooooooooooaaaaaaaaaaaallllllllll Lazio.