Spanish big guns threaten to strike over plans to wipe out 'Beckham law'

04 November 2009 04:50
So famous he has a law named after him: England international Beckham during his Real Madrid days

Spanish clubs have threatened to go on strike amid plans to wipe out tax laws that give La Liga a huge advantage over the Barclays Premier League.

The country's socialist government are supporting moves to end the so-called 'Beckham law', which allows high-earning foreigners to pay 24 per cent income tax instead of the 43 per cent levied on locals.

The Spanish League (LFP) have warned that their clubs will face a bill of more than £90million and could kill the competition.

The law coincided with David Beckham signing for Real Madrid from Manchester United in 2004.

It was designed to attract foreign executives to the country, but has helped Madrid and Barcelona to sign some of the best players in the world on contracts that would not be affordable to rivals across Europe.

If passed, the new law would come into effect on January 1. It would instantly add a £2million-a-year cost to Cristiano Ronaldo's contract at the Bernabeu.

The Portugal star signed an estimated £200,000 a week after-tax deal following his world record £80m summer move from Manchester United to Real Madrid.

The LFP have expressed 'great concern' and refuse to rule out 'halting the competition'.

  Their president Jose Luis Astiazaran said: 'This could bring very negative consequences. It would prevent La Liga from being the best of the world and would have negative impact on other aspects, such as the amount of people in stadiums and it would make our product less attractive to television.

'We have calculated that this reform would add 100m euros to the bill for Spanish football.'

Experts have continually pointed to the Beckham law as giving La Liga a competitive advantage.

Most foreigners in Spain negotiate after-tax salaries to protect against fluctuating levels, so the clubs rather than the employees would pick up the tab.

Atletico Madrid star Sergio Aguero's camp stunned Chelsea and Manchester United in the summer by demanding a salary that, after various taxes and fees, would cost an English club about £200,000 a week.

In Spain the cost would be closer to £160,000 a week for the club - £2m a year less.

It would cost this much: Chelsea were stunned by Aguero's wages

A change in the law would put Spain's tax rate above England's 40 per cent level for high earners, though a jump to 50 per cent in April is already concerning Premier League clubs, with Arsenal boss Arsene Wenger and star player Andrey Arshavin particular critics.

Arshavin is believed to have negotiated a gross deal of £80,000 a week with Arsenal, with some even suggesting that the increased tax bill in England meant he was taking a pay cut from his deal at Zenit St Petersburg.

He would see his take-home pay reduced by thousands each week when the 50 per cent level is brought in.

Italy (43 per cent), Germany (45 per cent), France (40 per cent), and Holland (30 per cent) would all have levels below England, while many emerging European economies have much lower flat rates of tax. 

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Source: Daily_Mail