Italy scraps plans to extend tax breaks for clubs' foreign signings

In a move that has drawn criticism from the country’s top soccer league, Italy’s government has decided to drop a draft proposal that would have extended tax breaks of up to 50% on the wages of sport clubs’ new signings from abroad until the end of February. The measure, in place since early 2020, was tailored to Italy’s Serie A top-flight soccer league and is now set to expire on Dec. 31.

This phasing out of the tax breaks means that Italian clubs will not be able to rely on the incentives for any foreign signings they make during the upcoming January transfer window.

Italy’s Serie A, which had lobbied for an extension of the benefit, has expressed disappointment at the government’s decision, calling it counterproductive. The league stated that failing to extend the measure would make teams less competitive, resulting in a drop in revenues and fewer resources for young players’ academies, as well as reduced industry volumes and less revenue for the inland revenue.

The most significant cost in the balance sheets of Serie A clubs is players’ salaries. The incentives were believed to have helped Italian teams attract top foreign talent and compete with richer peers like England’s Premier League.

Claudio Lotito, chair of Lazio and a senator for the co-ruling Forza Italia party, lobbied for the tax breaks to be maintained. However, government coalition partners, including the League, rejected his efforts.

League lawmaker Luca Toccalini stated, “Discounts to foreign footballers earning millions are immoral. Clubs should invest in young Italian players and not overpay foreigners who are often bad players.”

(Reporting by Federico Maccioni and Elvira Pollina; Editing by Alvise Armellini and Mark Potter)