EU orders Italy to change tax breaks for Serie A clubs

y Ann Cahill, Europe Correspondent

Most of the country’s biggest clubs are in serious financial difficulties with a survey showing that Serie A clubs lost almost €1 billion last season.

Under a Save Soccer banner, the government introduced special tax breaks this year that allowed clubs to write off transfer fees over ten years rather than over the normal three to four-years stipulated by EU law.

The practice is contrary to accounting regulations as it means club’s financial statements do not give a true picture of their finances, the European Commission warned.

Allowing them to write off player costs underestimates the true costs in a given year, Commission Competition spokesperson Jonathan Todd said.

It could also leave the clubs facing further financial trouble as other European clubs could sue them for breaking the accountancy laws.

The country’s 18 Serie A clubs have built up massive debts and many are facing bankruptcy mainly because of the huge sums they pay for footballers and their wage bills.

Just two years ago, Fiorentina, a top division team, went bankrupt and was forced into fourth division. Last year the only Serie A club to report a profit was Juventus.

Three of the country’s clubs - Juventus, Lazio and Roma - are public companies.

“If we allow one category of companies to break the rules so as to write off contracts over a longer period than their economic life other countries and sectors could follow”, Mr Todd added.

Italian clubs have been investigated by the country’s finance police who suspect them of fraud and, earlier this year, the offices of clubs in the top two divisions were raided.