Recently social media platforms have been flooded with reports suggesting that the government is set to alter the tax regulations law in Spain for Kylian Mbappe which left fans of the star player confused
Here In this article, we will provide you with all the details related to this tax regulation and whether is it true or not.
For the unversed, Real Madrid is on the brink of signing Kylian Mbappe on a free transfer from PSG this summer. Although the 25-year-old French star could potentially earn more with other clubs, there’s little doubt that he’ll become the highest-paid player in Real Madrid’s history.
What is the ‘Kylian Mbappe Law’ which the Government of Madrid could introduce in Spain and its meaning explained
In addition, Mbappe could benefit from a favorable tax provision that is set to be enacted in Madrid just before he signs.
About Mbappe Law
According to numerous reports, a new tax law, informally called the “Mbappe Law,” is expected to take effect in Madrid. This law follows in the footsteps of the “Beckham law,” which provided tax breaks to foreign nationals.
Proposed by the Partido Popular last year and due for a vote again this year, the new legislation would allow foreign nationals who invest in the region to receive up to 20% in tax reductions on their earnings in Real Madrid.
How Would Mbappe Law Work?
If you’re confused as to how It would work, let us tell you that if Mbappe were to earn €20 million per year at Real Madrid and invested €20 million in the region, he could receive a 20% tax rebate on that investment, amounting to a €4 million saving.
🚨 The government of the Madrid region will implement an “Mbappé Law”. 😳
It will reduce certain income taxes for rich foreigners. 🤑
(Source: @mundodeportivo) pic.twitter.com/KthAYNrkUo
— Transfer News Live (@DeadlineDayLive) April 22, 2024
Without this discount, Mbappe would face taxes close to 50% of his salary, with it, he would effectively be taxed at a rate of 24.5%, similar to someone earning just €24,000 per year. The average annual salary in Madrid is around €31,000.
This tax advantage could significantly boost Mbappe’s earnings, and it’s estimated that up to 30,000 people, largely high-income individuals, might relocate their tax domicile to Madrid to benefit from the law.
Who is behind this Legislation?
The political figures behind this legislation include the Partido Popular Mayor of Madrid Jose Luis Martinez-Almeida and the President of the Community of Madrid Isabel Diaz Ayuso. They both share close ties with Real Madrid President Florentino Perez.
They were seen together with Perez at the Laureus Awards, where they shared a table with Tom Brady, and were also spotted in the director’s box during Real Madrid’s match against Manchester City.
The overlapping relationships between Madrid’s political leaders and Real Madrid’s management raise questions about public interest and accountability, particularly as these policies and projects can significantly impact both the football club and the city’s economic landscape.
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