Taxes in San Marino

The Dipartimento Economia e Finanze and its Ufficio Tributario administer San Marino's national taxes. San Marino uses the euro, is outside the European Union and cooperates with Italy and the EU on customs and tax matters. No separate regional or municipal tax authority appears in the applicable system. IGR is calculated differently according to residence and income source. A resident individual generally declares worldwide income and may receive credit for foreign tax, limited to the San Marino tax attributable to that income. A non-resident is generally taxed on San Marino-source income, including income from land, buildings or other assets in San Marino, payments by the State or residents, and local work or a permanent establishment. The personal IGR rates are progressive: 9% up to EUR 10,000, 13% from EUR 10,000.01 to EUR 18,000, 17% from EUR 18,000.01 to EUR 28,000, 21% from EUR 28,000.01 to EUR 38,000, 25% from EUR 38,000.01 to EUR 50,000, 28% from EUR 50,000.01 to EUR 65,000, 31% from EUR 65,000.01 to EUR 80,000 and 35% above EUR 80,000. The bands are automatically adjusted every two years; the first adjustment is scheduled for 2028 and may not exceed six percentage points. From 2026 through 2030, income from self-employment, professional work and business activities covered by the specified provisions is taxed at 18% rather than 17%. Mandatory social contributions are deductible for personal assessment. Documented and traceable expenses, SMaC payments and eligible items under Annexes A and B of Law 141/2025 can also affect the calculation. Resident individuals may receive an SMaC tax credit linked to income bands, with stated maximums of EUR 5,000, EUR 900 or EUR 10,000 depending on the applicable band and conditions. A new cadastral income basis is being introduced gradually from 2026 to 2029, at 100%, 75%, 50% and 25% of the relevant transition basis. Companies calculate taxable net profit from business income less costs attributable to the business. Tax losses may be carried forward without a time limit, but generally only up to 70% of the taxable profit of a later year may be offset. Related-party transactions are assessed against the normal value, and relief depends on treaty or mutual-agreement procedures. Deductibility limits include 8% for advertising, 10% for data processing and market research, and 5% for representation expenses. Depreciation follows Annex D. A new economic activity may qualify for a 50% IGR reduction during its first five tax periods from 2026, producing an effective 9% rate where the 18% rate applies. Access can require that no comparable activity existed during the previous 12 months. The first licence fee may be exempt, and the annual licence is typically exempt for the first three years. A company may additionally need a new incorporation and at least one full-time employee within six months, followed by a second within 24 months. Imposta monofase is an indirect charge on imported goods and related services, normally paid by the business importing them. The standard rate is 17%, with product-specific rates such as 2% or 6%. Movable investment goods may be subject to 1% without refund, and vehicles used for business or private purposes may be subject to 8% within stated limits. Used goods can receive half the applicable rate. Re-export can allow a refund in the relevant cases, but capital and consumer goods are excluded from that refund treatment. San Marino also applies special taxes on petroleum products and separate registration, stamp, complementary, property and wealth charges under their specific rules. Payments and investment income can use special rates. Foreign dividends may be taxed at an optional 3% net frontier rate, foreign bonds at 10%, foreign account interest at 13% and other foreign interest at 10%. Certain capital income is taxed at 10% or 13%, particular bonds at 11%, and specified bank, deposit and term-account income at 13%, 6% or 5%. A foreign self-employed service paid to a non-resident can trigger 20% withholding, while use or leasing of certain assets to a non-resident can trigger 10% withholding. Termination payments up to EUR 5,000 are taxed at 2.5%, with 5% on the excess; supplementary pensions are taxed at 5%. Residents with foreign assets generally file DAPEF, the foreign-asset declaration, when they hold direct or indirect foreign financial investments, assets or participations. Recognised associations, foundations, trusts and fiduciary arrangements can also fall within its scope. IRAFE applies to resident individuals who have been resident for more than five consecutive years and do not use the special regime for foreign income. It is 0.20% on foreign financial assets held at 31 December when the total exceeds EUR 20,000. The amount is self-assessed through DAPEF; an overpayment creates a refund claim or may be credited against SMaC. Tax procedures use the PA/IGR portal and forms such as IGRG for employer certificates, IGRL for individuals, IGRM for self-employed associations, IGRN for co-owned companies and IGRO for a withholding agent. A taxpayer may delegate work to an employee, commercialista or other professional. Employees and pensioners usually have monthly withholding followed by an annual return in June of the following year. Companies and other business taxpayers generally pay an annual balance and two advance instalments; from 2026, the instalments are 35% by 31 August and 55% by 30 November of the previous year's tax. No advance payment is due in the stated cases of suspension or termination. Amounts can be offset within the Ufficio Tributario tax account, and a timely refund is generally due by 31 October of the following year through SMaC. For trade with Italy, electronic invoices apply to B2B exchanges of goods and services under the relevant San Marino rules. Domestic transactions do not currently use a general electronic-invoice requirement. Monofase payment and export evidence are handled through the Ufficio Tributario; for imports through Poste San Marino, the tax may be payable when the item is collected. The Ufficio Tributario can review direct and indirect taxes, compare PA data, request documents and counterpart information, and conduct financial investigations. A control report can lead to an accertamento, or formal tax assessment. Taxpayers have rights to information, a hearing with the authority, opposition or appeal, and correction or supplementation before a control begins where the applicable time limits allow. Collection can proceed through a payment notice, the tax account or a formal collection register. Penalties depend on the violation. A material error can attract 10% of the additional tax. An inaccurate return can attract 50% to 100%, or 75% to 150% where tax evasion exceeds EUR 120,000. Failure to file can attract 100% to 300%, with a minimum of EUR 500; a special case covering only certified salary, pension or cadastral income carries EUR 100. A late return costs EUR 400, reduced by half when filed within 30 days. Late payment attracts 8%, non-payment 10%, and failure to withhold 50%, in addition to interest. Qualified evasion can also create criminal tax exposure. San Marino participates in mutual administrative assistance, tax information exchange agreements, double-tax agreements, FATCA and CRS. The Ufficio Centrale di Collegamento, or CLO, acts as the competent authority for international exchange. Financial institutions report CRS data electronically to the CLO, which generally transmits it abroad by 30 September of the following year. The 2025 EU-San Marino protocol extends automatic account-information exchange, and DD11/2026 introduces crypto-asset due diligence from 1 January 2026 with reporting from tax year 2027 by 30 April of the following year. The tax treaty with Italy has been in force since 3 October 2013. Cross-border cases require separate checks of tax residence, work location, permanent establishment, source state, beneficial ownership and certificates of residence. An Italy-to-San Marino commuter can face taxation in both the work and residence states, with Italian credit or a special allowance depending on Italian law. No general treaty benefit follows solely from living or working across the border.