San Marino, the world's third-oldest republic and one of Europe's smallest countries, operates a distinctive tax system that reflects its unique economic and political landscape. Nestled entirely within Italy, this microstate has developed a sophisticated fiscal approach designed to attract international businesses and residents while maintaining its economic independence.

As a small but economically dynamic nation, San Marino has strategically positioned itself as an attractive destination for international investors and professionals. The country's tax system is characterized by relatively low tax rates, special economic zones, and a range of incentives designed to stimulate economic growth and foreign investment.

The San Marinese economy is diverse, with strengths in financial services, manufacturing, tourism, and banking. In recent years, the country has been modernizing its tax framework to align with international standards while preserving its competitive edge.

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San Marinese Income Tax

San Marino employs a progressive personal income tax system with the following key characteristics:

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Social security contributions are significant:

• Employee social security contribution: Approximately 7-8% of gross salary
• Employer social security contribution: Around 15-17% of gross salary

If you want to have a better understanding of the taxes you should pay on personal income in San Marino, you can use the personal tax calculator in the Taxation section of the San Marino page.‍

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San Marinese Tax on Overseas Income‍

The country's approach to foreign income is nuanced:

1. Residents: Taxed on worldwide income
2. Non-residents: Taxed only on San Marino-sourced income

Residency is typically determined by:

• Spending more than 183 days in San Marino within a 12-month period
• Having a primary residence in the country
• Maintaining primary economic interests within San Marino

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San Marinese Tax on Investments

‍Investment income receives specific tax treatment:

• Dividends: Taxed at 15%
• Capital Gains: Generally taxed at 20%
• Interest Income: Typically taxed at 15%
• Rental Income: Taxed at progressive income tax rates

The country offers various tax-efficient investment vehicles and has been developing its financial services sector to attract international investors.‍

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San Marinese Corporate Taxation

‍Corporate taxation is designed to be competitive:

• Corporate Tax Rate: 17%
• Small Business Rate: Reduced rates for qualifying small and medium enterprises
• Value Added Tax (VAT):
  • Standard rate: 17%
  • Reduced rates for specific goods and services
• Withholding Tax: Applicable to certain payments to non-residents

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Special Tax Regimes‍

San Marino offers several unique tax arrangements:

1. Foreign Investment Incentives: Attractive tax breaks for new foreign businesses
2. Technology and Innovation Zones: Special tax benefits for tech and research companies
3. Financial Services Incentives: Competitive tax treatment for financial sector businesses
4. Startup Support: Reduced tax rates and support for new business formations

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Regional Comparison

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‍Tax Planning for San Marino‍

Effective tax management requires a strategic approach:

1. Residency Status Optimization: Carefully managing tax residency
2. Investment Strategy: Utilizing the country's tax-efficient investment frameworks
3. Comprehensive Documentation: Maintaining detailed financial records
4. Professional Consultation: Engaging with local tax experts

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