Law No. 141/2025, introducing the new and long-awaited (and partly debated) IGR Reform, has been published in the Official Bulletin. The measure, approved on second reading by the Great and General Council, redesigns some fundamental components of the San Marino tax system and will have immediate effects on taxpayers, families, and businesses.
Below is a summary of the main changes.
From deduction to tax credit: the most significant change
One of the key changes in the reform is the transition from a system of deductions to a system of tax credits.
In practice, some expenses that until now reduced taxable income will instead directly reduce tax. due.
This change will impact the IGR calculation differently depending on the income level, and will require a specific assessment on a case-by-case basis.
Mandatory tax audits for very low incomes
The reform provides a new automatic criterion for triggering tax audits.
Taxpayers who, for three consecutive years, have an average income of less than €15,000 will be subject to mandatory, no longer discretionary, audits.
The stated objective is to combat anomalies and situations inconsistent with actual tax capacity.
Deductibility for babysitting expenses increases
The new legislation also affects expenses related to care services.
The maximum deductible amount for babysitting expenses is raised to €4,000, offering more concrete support to families with young children and households in which both parents work.
School: The limit for deducting school fees has changed
Deductions for school fees are also Remodeled:
- The single ceiling of €5,000 per family unit will no longer apply,
- But a limit of €4,000 for each dependent child will apply.
A significant change, which gives greater value to large families.
SMAC Deductions: Introduces Progressivity
Following discussions with the social partners, the reform also includes the progressivity of SMAC deductions. Specifically, the benefit generated by using the SMAC Card will vary based on income: higher for low-income earners, lower for high-income earners.
Entry into force: what the law provides
Article 54 of Law No. 141/2025 establishes that the changes introduced by this law apply starting from the 2026 tax period.
