Jermaine Pennant has signed a lucrative contract with Real Zaragoza which will see him earn the equivalent of £80,000 a week plus a free villa and car included in his deal.
Jermaine Pennant has highlighted the riches on offer for English players in Spain by agreeing a deal at Real Zaragoza which is worth the equivalent of £80,000 a week.
The winger, who spent the latter half of last season on loan from Liverpool at Portsmouth before he became a free agent at the beginning of the month, chose Zaragoza, who are newly promoted to La Liga, ahead of Atlético Madrid and Espanyol.
The 26-year-old also had an offer on the table from Milan but he believes that the Italian club will re-sign David Beckham and start him on the right side of midfield, which would restrict Pennant's playing opportunities.
It is the detail of Pennant's deal at Zaragoza with regard to taxes that will have some English players and agents salivating. His three-year contract is worth £6.24m net, with the Spanish club effectively paying his taxes. They have been helped to do this by top-bracket tax perks or what has become informally known in Spain as the "Beckham law". In an attempt to encourage overseas businesses to place their leading executives in Spain, the government introduced legislation to cut taxes in the top bracket to 23% for the first five years. Real Madrid, a club synonymous with galáctico signings such as Beckham, then argued successfully that leading overseas footballers ought to enjoy the same privilege.
Zaragoza will pay £9,200 a week in taxes on behalf of Pennant, as they have guaranteed him take-home pay of £40,000 a week. In England, where players tend to be paid gross and, as of April, the tax rate for high earners stands at 50%, Pennant would have needed a salary of £80,000 a week to match what he will now get.
Arsène Wenger, the Arsenal manager who signed Pennant as a 15-year-old from Notts County for £2m, has warned that England's 50% tax rate for annual earners of more than £150,000 will prompt foreign players to stay away and those already in the Premier League to consider their futures. Andrey Arshavin, Arsenal's £15m January recruit from Zenit St Petersburg, has been surprised at the UK tax laws.
"If they do not solve the tax issues in England, it's possible that they will see an exodus of stars," the Russia international told Sport Express newspaper in his homeland. "But, in my view, the Premier League is still the best. However, we will find out when we see what happens in the Champions League, of course."
English players are not noted for their willingness to move abroad but the case of Pennant, who has had a free villa and car included in his deal, suggests that might be about to change.
"I wanted to come to Spain and I had offers from important teams in Europe but I joined Real Zaragoza," said Pennant, who has had a £21m release clause written into his contract. "I really want to get started and do well in the league."
Pennant scored three goals during his three-year spell at the Anfield club, having signed from Birmingham City for £6.7m in July 2007.