Atypical residence subject to a preferential tax regime for pensioners

Atypical residence for pensioners is granted to pensioners from European Union countries, Switzerland and those identified by a specific regulation of the Congress of State, if, not incurring the cases referred to in article 17 paragraphs 1 and 2 of Law no. 118 of 2010, the applicant: 

1. has a demonstrable annual income of no less than 120,000.00 gross annual euros or demonstrable movable assets of no less than 500,000.00 euros; 
2. has never previously resided in San Marino or has not, at the date of entry into force of this article, consolidated his/her registered residence in the territory of San Marino. 

With regard to pension income, a substitute tax for the general personal income tax equal to 6% is due both in the case where there is a treaty against double taxation between the country of origin and San Marino, and in the case where the country of origin applies a withholding tax.

The substitute tax is paid in a single solution by the date set for the payment of the balance of general income taxes. For the assessment, collection, litigation and sanctions, the provisions set forth for the general personal income tax apply, where compatible. The substitute tax is not deductible from any other tax or contribution. 

Without prejudice to other conditions, if the applicant is a pensioner who has held the role of Director or Official of an International Organization and who has a demonstrable annual income of no less than 100,000.00 euros gross per year, the general income tax applied is equal to 3%.

The applicant for atypical pensioner residence must file a specific application with the Department of Foreign Affairs and pay a tax fee for practical instruction, which absorbs all stamp duties and office fees, in the amount of 1,000.00 euros to be collected on the relevant budget chapter of the Registry Office and Registry Office.

In addition to the payment receipt, the following are attached to the application: 

1. copy of a valid document for expatriation, signed and declared authentic by the public official who receives the application; 
2. preliminary contract or promise to purchase buildings or preliminary rental contract subject to the condition precedent of the granting of residency. Applications that have as an element of rooting in the territory the sharing of the same housing unit between subjects not belonging to the same family unit or in any case not linked by relationships similar to cohabitation are not admitted;
3. certificate of residence, general criminal record, certificate of pending criminal charges or equivalent documents (for countries where the same exists); 
4. declaration in lieu of a sworn statement, made to the public official who receives the application, regarding the citizenships held, places of residence in the last 5 years, the absence of criminal convictions, the absence of pending criminal charges against the applicant and regular fulfillment of tax obligations in any country; 
5. documentation demonstrating that the applicant and family members who intend to transfer their residence to the Republic have sufficient resources for their own maintenance; 
6. documentation demonstrating that the applicant has opened a current account with a Credit Institution of the Republic of San Marino. 

The Department of Foreign Affairs, having received the application including all the documentation referred to in the preceding paragraph, submits it to the attention of the Permanent Council Commission for Foreign Affairs, Emigration and Immigration, which decides on the same within sixty days. The decision is not subject to review in any case. 

The purchase deed referred to in letter b) above is not subject to prior authorization by the Council of Twelve and pays the current registration tax. The resolution of the Permanent Council Commission for Foreign Affairs, Emigration and Immigration granting atypical pensioner residence is attached to the deed of purchase for the purposes of transcription and transfer. 

The applicant for atypical pensioner residence may apply for its extension, limited to the subjects referred to in Article 16 of Law No. 118 of 2010, paragraph 3 bis, in possession of the requirements set out in this law. 

Until the consolidation of the residence pursuant to paragraph 14 of Law No. 118 of 2010, the holder of atypical pensioner residence and secondary applicants: 

1. they cannot access any type of employment relationship in the Enlarged Public Sector and in entities that, under public or private law, are participated in by the Most Excellent Chamber; 
2. they are not entitled to receive benefits, contributions, allowances and public grants of any kind linked to the possession of residence, nor to the contribution referred to in Law 31 March 2015 n.44; 
3. they are required to assume full responsibility for the costs of health care, through private insurance or with the Institute for Social Security, in the manner established by the Institute itself, to cover any inherent risk. 

The preferential tax regime is granted for a period of ten consecutive years and is renewable. The effects of the preferential tax regime cease in the event of omitted or partial payment of the substitute tax. The effects produced in previous tax periods are saved. Revocation or forfeiture of the tax regime precludes the exercise of a new request for atypical residence. 

Upon granting atypical residence for pensioners by the Permanent Council Commission for Foreign Affairs, Emigration and Immigration, the Department of Foreign Affairs shall communicate to the applicant the outcome of the application and request the production of the following documentation: 

1. in the case referred to in letter b) above, a certified copy of the public deed of sale or rental contract of the real estate unit; 
2. declaration regarding the place of residence in the Republic. 

The Department of Foreign Affairs transmits to the Civil Status Officer the data necessary for the registration of the applicant in the Registers of the resident population and proceeds to initiate, through the Gendarmerie, the appropriate checks also regarding the documentation produced; it also transmits the applicant’s data to the Tax Office for the competent tax controls which reports annually to the Department of Foreign Affairs regarding the maintenance of the competence requirements.

Violation of the duties referred to in this article entails the revocation with immediate effect of the atypical pensioner residence of the holder of atypical residence and of the secondary applicants to whom it has been extended. The atypical residence for pensioners is revoked with immediate effect also in the cases provided for in Article 17 of Law No. 118 of 2010. Those who have expressly declared false information or have produced acts and documents that have turned out to be false, without prejudice to the criminal sanctions in force, are subject to the immediate revocation of the residence. 

In particular, the omitted or partial payment of the substitute tax or in the event of failure to renew the medical insurance, the beneficiary is granted ninety current days to restore the satisfaction of the requirements requested for the granting and maintenance of the atypical residence for pensioners, after which the office, which has ascertained the non-compliance, reports them to the Office of Civil Status, Demographic and Electoral Services for the revocation of the residence. The effects produced in previous tax periods are saved. 

A maximum number of residences may be granted, pursuant to this article, equal to 500 per year, not cocounting in this number the subjects for whom family reunification has been requested and the subjects, with residence not yet consolidated, who intend to request atypical pensioner residence. This number can be changed every year by delegated decree. 

After ten years from registration in the register of the resident population, the atypical pensioner residence is considered consolidated and therefore the prohibitions, obligations and constraints provided for herein cease for the foreigner and for the subjects for whom reunification has been requested and the general rules on residence apply, as well as the provisions of paragraphs 3 bis, 3 ter and 3 quater of article 16 of Law no. 118 of 2010. 

The prohibitions, obligations and constraints provided for herein also cease for the foreigner who renounces the atypical pensioner residence.

Applicants for elective or atypical residence may obtain a temporary residence permit, for a maximum duration of 6 months, while waiting to complete the process for registered residence. The Department of Foreign Affairs, the office responsible for collecting the application, promptly forwards the documentation to the Gendarmerie Command – Foreigners’ Office, the office responsible for issuing the temporary residence permit.