What is the Mbappe Law? Real Madrid signing to get tax break from government

Robin Bairner

Updated: 22 Apr 2024 06:15 CDT
3 min read

The law in Madrid is set to change to benefit Kylian Mbappe — © IMAGO

Real Madrid’s move for Kylian Mbappe will prompt the government to change tax laws to make it less of a financial burden for Los Blancos to sign the PSG star, according to a report.

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Mundo Deportivo states that the autonomous government of the Madrid region is poised to pass the ‘Mbappe Law’ in a bid to help the club land the 25-year-old superstar.

The World Cup winner is set to move to the Bernabeu side when his contract at PSG expires in the summer.

Current ETV

Kylian Mbappé

F (CL), AM (L)

PSG

Kylian Mbappé

F (CL), AM (L)

PSG

ETV Range

€80.6M - €134.4M

Although the deal will officially be a free transfer, Mbappe stands to land a world-record signing on bonus and will receive a massive wage. It will, therefore, stretch the club’s finances to the maximum.

A move from the regional government, though, is designed to help Real Madrid get their man and help eliminate the massive wage drop he faces when he finally completes his inevitable move.

Mundo Deportivo reports: “The Community of Madrid is processing the approval of the so-called Mbappé Law that will eliminate regional personal income tax for foreigners who settle in the capital of Spain and carry out investments.

“If the Law passes and Real Madrid complete the signing of Kylian Mbappe, the France star will pay 24.5% of personal income tax, only 2% more than what workers who earn between €12,000 and €18,000 gross per year.

“If Mbappe, as everything indicates, ends up signing for Madrid, it is estimated that his salary will be around €30 million net per season, so he would pay the same personal income tax as a Madrid native who earns €20,000 gross.”

Mbappe Law following Beckham precedent

Real Madrid have previously had the laws changed in their favour, with David Beckham one of the benefactors.

“The Mbappe Law is reminiscent of the famous Beckham Law applied in 2005, two years after the signing of the English midfielder from Manchester United. This law consisted of a tax regime that allowed foreigners who moved to Spain to work pay a fixed personal income tax rate of 24% regardless of income,” Mundo Deportivo notes.