Updated as of December 01, 2025

Prerequisite

All income, wherever produced, by resident subjects in cash or in kind, continuous or occasional, coming from any source, is subject to the general income tax. Non-resident subjects are taxable persons limited to income produced within the territory.

Definitions

The following terms are understood as:

• Tax: the general income tax.
• Taxpayer: the taxable person regarding tax obligations, that is, the subject who, facing a legal fact or act revealing their contributory capacity, traced back to the tax prerequisite, is required to pay the latter. The taxpayer assumes the status of withholding agent when required to withhold the tax due from another taxable person and pay it to the Tax Administration, interposing themselves in the relationship between the latter and the subjects.
• Tax Administration: the set of offices, bodies, and authorities in charge of implementing tax provisions.
• Tax Office: the Public Administration Office deputized for the activities of collection, control, and assessment of the general income tax.
• Natural person: the individual holding income. This definition also includes self-employed workers and holders of economic activities exercised in the form of a sole proprietorship, partnership, and joint venture.
• Cross-border worker: any worker who, employed in the territory of the State, resides in the territory of another State where they return in principle every day or at least once a week.
• Legal person: the subject of law constituted by the organized complex of persons and assets, to which the law attributes legal capacity.
• Economic operator: the subject who, regardless of legal form, holds a license or similar authorization aimed at the exercise of an economic activity.
• Dwelling: the place within the territory of the State in which a subject performs acts of private life, regardless of whether this constitutes the place of their registered residence in the State or their domicile.
• Center of vital interests: the concentration within the territory of the State of the prevalence of a subject’s economic, patrimonial, social, and family interests.
• Main residence: the dwelling where the taxpayer has their registered residence, or, in the absence of registered residence, their actual abode.
• Possessor: the owner of the asset or the holder of another real right on the same or the lessee in a financial leasing contract.
• Group of companies: the set of companies, resident and non-resident in the territory of the Republic of San Marino, consisting of the parent company, or in any case capable of exercising significant influence, and by the company (or companies) directly or indirectly controlled by it, or in any case subjected to significant influence.
• Controlled companies (Subsidiaries): those in which another company holds, directly or indirectly, the majority of votes exercisable for the appointment of members of the administrative body; those in which another company, also based on agreements with other shareholders, holds, directly or indirectly, sufficient votes to exercise a dominant influence, for the appointment of members of the administrative body; those on which another company has the right, by virtue of a law, other regulatory provision, a contract or a statutory clause, to exercise a dominant influence for the appointment of members of the administrative body.
• Companies subject to significant influence (Associates): those in which another company holds, directly or indirectly, at least 20% of the voting rights exercisable for the appointment of members of the administrative body, provided that there is no other shareholder, outside the ”Group of companies”, who holds the absolute majority of votes exercisable for the same purposes.
• Party related to the natural person: companies controlled by the natural person as well as family members such as the spouse, relatives up to the second degree, and in-laws up to the second degree.
• IT application: is the IT procedure whose access is made possible electronically to the taxpayer, or to the subject delegated by them, which allows inserting and transmitting tax returns and managing debit and credit tax balances.
• Electronic signature: constitutes the process, traced by the application, with which the user, regularly registered and identified, upon accreditation, validates the information entered.
• User: is the subject who accesses the application, upon identification, inserts the requested information and validates the contents. The user can be the taxpayer required to fulfill declaration obligations, the employer, for the fulfillment of obligations, or one of the delegated subjects.

Tax period

The tax is due for calendar years, to each of which corresponds an autonomous tax obligation. The attribution of income to the tax period is regulated by the rules relating to the category in which they fall.

Taxable persons

The general income tax applies:

• to natural persons resident in the territory of the State;
• to natural persons not resident in the territory of the State for income produced therein.

Natural persons are considered residents for whom, in the reference fiscal period, at least one of the following conditions occurs:

• they have registered residence in the State for the majority of the tax period;
• they dwell for the majority of the tax period in the territory of the State;
• they have the center of vital interests in the territory of the State.

Partnerships are not taxable subjects; income produced by said companies, in proportion to the profit-sharing quotas, is imputed to each partner regardless of actual perception. Associations between professionals are assimilated to partnerships.

Classification of income

Income, including that produced abroad, is classified as follows:

• capital income;
• income from land and buildings;
• employment and pension income;
• business income;
• miscellaneous income.

Default interest and interest for payment deferral constitute income of the same category as those from which the credits on which such interest has accrued derive. Proceeds obtained in substitution of income, also by effect of assignment of the relative credits, and indemnities obtained, also in insurance form, as compensation for damages consisting in the loss of income, excluding those dependent on permanent disability or death, constitute income of the same category as those substituted or lost. Proceeds deriving from joint venture contracts fall under capital income if the contract provides exclusively for the contribution of capital; otherwise, they are considered assimilated to employment income.

Taxable base

The taxable base is constituted, for resident taxpayers, by the total income formed by all income of the taxable person, net of deductible charges provided for, and excluding:

• income subject to separate taxation;
• income subject to withholding tax as a final tax;
• exempt income.

For non-resident taxpayers, the taxable base is constituted by income produced in the territory of the State. The following contribute to forming the taxpayer’s income, insofar as imputed to the same:

• income, excluding employment income as own income, of cohabiting minor children, including recognized natural children, adopted children, and affiliates;
• others’ income of which they have free availability or administration without the obligation of rendering accounts.

Deductible charges

From the total income, net of exempt income and that subject to separate taxation, if not already deductible in the determination of individual income and cumulatively with other deductions allowed by this law, defined expenses are deducted, if incurred by the taxpayer fiscally resident in the territory of the State, also on behalf of dependent persons, in the reference tax period, provided they are duly documented by invoice or equivalent document and incurred with traceable payment instruments, such as electronic instruments, bank transfers, checks, or tracked with SMaC Card.

Deductions are not due where the Tax Office Unit proceeds with a synthetic assessment of the taxpayer’s total income, unless the taxpayer demonstrates that the synthetic assessment is due to force majeure. The provisions may be modified by delegated decree, which may also integrate and modify the methods of application of the same.

The Tax Office Unit, within the scope of control and assessment activity, must disallow in whole or in part the application of deductible charges when it encounters, subject to proof to the contrary provided by the taxpayer, phenomena of abuse or undue deduction aimed exclusively at obtaining the tax benefit.

Subjective deductions

From the tax on income possessed by fiscally resident natural persons, the following are deducted:

• euro 250.00 for the dependent spouse not legally and effectively separated;
• euro 250.00 for each dependent child;
• euro 125.00 for dependent parents and parents-in-law even if not cohabiting;
• euro 125.00 for every other dependent cohabiting family member;
• euro 125.00 for relatives and in-laws who effectively exercise the right to alimony.

The following are considered dependents:

• minor children, including natural children, adopted children and affiliates, minors in foster care according to what is established by decree of the Judicial Authority;
• children of major age permanently unable to work, those not over twenty-six years of age attending legal courses of study, including natural children, adopted children, affiliates and finally those unemployed; the latter must be regularly registered in the job placement lists and not have refused job offers compatible with the duties provided for by their list of belonging and must also be cohabiting with the taxpayer.

The indicated persons are considered dependent if they have their own gross income for an amount not exceeding that of the social pension, if resident. The aforesaid limit does not apply in relation to income received by disabled subjects. Tax deductions for family burdens are apportioned to the months of the year and do not belong to non-resident taxable persons.

Deductions for children can be used only by one of the parents or, alternatively, by both in the measure of 50 percent each. If the deduction used by the parents exceeds 100 percent of the same in total, the deduction is determined in the measure of 50 percent for each parent. Deductions for other family members are usable in full by a single taxpayer or pro-rata by the taxpayers who assume the family burden.

Deductions are increased by 20 percent if the number of dependent family members exceeds two units, or, when the dependent family member is a disabled subject or permanently infirm person.

Fiscally resident natural persons are recognized a tax deduction on expenses, listed below, duly documented by invoice or equivalent document, provided they are incurred with traceable payment instruments, such as electronic instruments, bank transfers, checks or tracked with SMaC Card, in an amount equal to:

• 18 percent of expenses for dental, health prostheses and those for orthodontic and dental care, in a total measure not exceeding euro 1,600.00, for the income holder and for each dependent family member;
• 15 percent on 50 percent of the rent of properties used for residential purposes up to a maximum amount of euro 6,000.00, where the fiscally resident taxpayer has their actual abode. The aforesaid percentage of the rent is raised to 80 percent if the tenant has a registered age of less than thirty-five years.

From the tax on employment income, assimilated to employment and pension income received by subjects fiscally resident in the territory and by non-resident subjects, a tax is deducted for expenses incurred in San Marino territory for the purchase of goods and services, with the SMaC Card. The deduction is also recognized to resident subjects, holders of income subject to ordinary taxation other than employment income.

Application of the tax

The general income tax is determined by applying the indicated progressive rate. For subjects holding self-employment and business income, the tax on income other than the aforesaid is determined by applying progressive taxation by brackets.

For subjects holding self-employment and business income, the provided tax deduction, relating to SMaC Card expenses incurred in the territory, applies and is deducted exclusively from income subject to separate taxation, in the following percentages and methods:

• 18 percent for the maximum amount of euro 5,000.00 per year for taxable income up to euro 25,000.00;
• for taxable income exceeding euro 25,000.00 and up to euro 50,000.00, the tax deduction is recognized for a maximum cap of euro 900.00, applying the percentage rate calculated based on the foreseen ratio to the SMaC Card expenses incurred;
• 9 percent for the maximum amount of euro 10,000.00 per year for taxable income exceeding euro 50,000.00.

Income produced abroad and tax credit

If income produced abroad contributes to the formation of the total income of natural persons, taxes paid therein definitively or to be considered such, in any case not recoverable, on such income are admitted as a deduction from the net tax due up to the amount of the tax quota corresponding to the ratio between income produced abroad and total income.

By way of derogation, taxes paid abroad definitively or to be considered such, in any case not recoverable, on business or self-employment income may be admitted as a deduction from the net tax due for such income produced in San Marino; such deduction is admitted up to the amount of the tax quota corresponding to the ratio between revenues produced abroad and total revenues.

Tax rates and brackets relating to the taxation of natural persons’ income

The brackets are adjusted automatically every two years according to the increase in the cost of living index. The revaluation of income brackets cannot in any case exceed 6 percentage points. The first adjustment is made in the 2028 tax period.

Rates relating to the taxation of legal persons’ income

The general income tax for legal persons is determined by applying the proportional rate in the measure of 17% to the calculated taxable income.

Extraordinarily and merely transitionally for the tax periods 2026, 2027, 2028, 2029 and 2030, the IGR tax on self-employment income, business income, legal persons and emoluments for end-of-term treatment of company directors paid to fiscally resident subjects is determined by applying the proportional rate in the measure of 18%, instead of 17%. The higher tax revenue deriving from the aforesaid increase is destined for infrastructural investments for the country and for the reduction of public debt.