Italian Tax Incentive Policy Adjustments Impact Inter Milan Strategy: Detailed Analysis of the Dutch Wing and Spanish Defender Situations

As Italy's "Tax Growth Act" principle lapses in early 2024, a widely held belief is that foreign players joining Serie A will no longer benefit from tax breaks. However, the adjustments to the legislation are not absolute; there are certain exceptions. According to ANSA, the Italian Parliament and the Department of Justice are currently in discussions with experts from the football industry to make potential adjustments to the tax benefits. Representatives from six clubs, including Inter Milan, are involved in these talks. Inter Milan's transfer committee is also studying the three "loopholes" left by the tax policy, which could significantly impact the club's future team-building strategies and recruitment plans.

The overarching principle is that contracts signed before December 31, 2023, that qualify for tax benefits will continue to enjoy these advantages. However, even if a player meets the tax benefit criteria, any contracts signed (either new or extensions) after January 1, 2024, will not be eligible for tax breaks. There are three specific exceptions to this rule.

First, if a contract was signed before December 31, 2023, and the individual has been paying taxes in Italy for five years, they can still enjoy tax benefits upon renewing their contract after 2024, provided they stay in Italy for an additional three years. If they do not fulfill this three-year period, they must return the tax benefits, or they will face tax evasion charges. This clause has sparked considerable debate as the 5+3 year requirement complicates the transfer of talent out of Serie A, which currently functions as a talent transit league.

Second, if a qualifying foreign worker gives birth to a child in Italy or brings an existing child to live in Italy, or even adopts a child after 2024, they can receive a 60% tax refund.

Third, if a foreign worker purchases property in Italy before December 31, 2023, they can still enjoy tax benefits even if they move in after 2024.

These exceptions will impact the future of certain Inter Milan players, such as Denzel Dumfries. The Dutch wing-back's contract renewal remains unresolved. Dumfries demands a high salary, but his global recognition and market value are relatively low, with few strong clubs genuinely interested in him. This situation puts Inter Milan in a difficult position. Offering him a lucrative contract seems excessive, but selling him this summer might not fetch a high price. Letting him leave on a free transfer when his contract expires in 2025 is undesirable for Inter. A viable solution might be to help Dumfries leverage the child-related tax benefit to reduce costs and facilitate his contract renewal.

During Christmas last year, Dumfries posted that his partner, Kenzelville (their marital status remains unclear), was pregnant. Fans wondered if the child would be born in time to qualify for the tax benefit. In reality, Dumfries already has two children living with him in Italy, making him eligible for the tax benefit.

Another player impacted by the tax policy is Atlético Madrid defender Mario Hermoso. Recently, Hermoso's agent visited Milan. There are conflicting reports from transfer market experts on whether the agent met with Inter Milan officials. Normally, Inter cannot afford a player like Hermoso, who demands a net annual salary of €5 million, especially if he cannot guarantee a starting position. However, if Hermoso qualifies for the tax benefit by bringing at least one of his two children to Italy, the situation changes.

Following these adjustments to Italy's tax policy, some Inter fans have taken to social media to discuss potential impacts. Several reporters who follow the team closely suggest that Inter aims to gamble on a young forward this summer, similar to their signings of Asllani and Bisseck in previous summers. The exact target is hard to pinpoint, as few Serie A fans had heard of Bisseck before Inter signed him last year. Given the new tax policy, some fans are jokingly identifying potential recruits who meet the tax benefit criteria, such as young talents who have played abroad for over two years but bought property in Italy before 2023, or young players with children who could "bring their kids along."

Although these discussions may seem humorous, Inter Milan will undoubtedly consider leveraging these policies. Fans with interest and knowledge might even help uncover Inter’s next “lottery ticket” in the transfer market.

In conclusion, the adjustments to Italy’s tax incentive policy will significantly influence Inter Milan’s strategic planning and recruitment. The club must navigate these changes carefully to optimize their squad composition while managing financial constraints. The cases of Dumfries and Hermoso exemplify the complex considerations involved in player contracts and transfers under the new tax regime. Inter Milan’s ability to adapt to these changes will be crucial in maintaining their competitiveness in Serie A and beyond.