In Italy, the “Beckham Law” or the Crescita decree is known as the law that allows foreign football players to avoid paying 50% of their taxes on Italian soil as long as they commit to stay at least two years in that country.
The nickname of the law comes from Spain where a similar reform was used and one of the main beneficiaries was the English midfielder, David Beckham, when he signed for Real Madrid in 2003. The idea of this law is to favor the arrival of foreign talents to the country through a lower payment of taxes that allow the player to pocket more money.
If we make a comparison between Italy, Spain, France and Portugal, we find that in Italy the savings of a footballer can even be up to 70% (with certain conditions) compared to the local citizen who is governed by the same general tax regime. In Portugal, savings can be up to 60% and in Spain up to 30% compared to taxation under the general regime. The case of France is striking, whose taxes for foreigners only save “only” 20% compared to local citizens. This, along with the financial problems for television rights, may be the main reason for Ligue 1 to lose a lot of talent in the coming years.
Returning to Italy, the reform that is being proposed includes reducing the taxes of Italians or foreigners who have resided outside the country in the last 2 years by 30%, thus meaning that would only apply for the first 2 years of their stay in Italy. It can be difficult for Italian clubs to handle this reform if we consider how it can be applied not only to future signings but also to players who currently have a contract with Italian clubs, along with the lack of fans in stadiums as a result of the pandemic, which can have a very strong impact on Italian football.
We will have to monitor these types of situations that can significantly affect football.