Corporate Profits

  • Law No. 71/2013 and following Law No. 115/2017, contain meaningful government measures in terms of tax reductions for newly-established companies whose owners have performed any business activity in the Republic of San Marino in the previous year and who hire an employee within 6 months (including the same administrator) and a second employee within 24 months of activity.

    The most important measure is the reduction of the General Income Tax (IGR): a newly-established company, whose partners have performed any business activity in San Marinoin the last eight years, is entitled to a 8.5% tax reduction on profits for 5 years of business activity starting from the legal recognition of the company (at the end of the 5 years the company will be subject to the regular 17% tax rate).

    Moreover there are some meaningful tax reductions for the introduction of technological investments and improvements described in detail in the following paragraphs.

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  • 8.5%

    Taxation of corporate
    profits for 5 years of business activity


    90% of the annual profits allocated for the functional investments shall not represent taxable income

Tax reductions on reinvested profits

More specifically, for such entities, regardless of their corporate form, in ordinary accounting processes, the annual profits allocated for investments in operating assets in the same company do not represent taxable assets for direct taxation purposes. It must however be pointed out that the provisions of this law apply to companies with at least 5 employees hired with open-ended work contracts or 3 employees if these are San Marino nationals or residents hired with open-ended work contracts.

For purposes of the law decree, investment measures are deemed those company projects envisaging

  • The purchase of tangible and intangible assets, the introduction of technological improvements or technologies to make new products or setting up new production processes (the investment amount shall not be less than 50,000 euro).
  • buildings, purchases (the amount shall not be below 300,000 euro), restructuring jobs or building extensions (the amount shall not be below 150,000 euro) with the aim of upgrading existing production processes or introducing new ones in accordance with company projects involving the employment of at least 5 persons. These properties cannot be sold before a 10 year term.
  • The acquisition of plants, machinery or technological processes aimed at achieving large energy savings or large reductions in pollution(the amount shall not be below 20,000 euro).

The aforementioned investments can be performed both by direct purchase and via financial leasing contracts. Major business projects in the touristic sector, aimed at the upgrading of the tourism and catering services, envisaging the building, acquisition, restructuring works or building extensions, are deemed qualifying investments for incentives.

Investment measures that are not deemed taxable income

    • 60% of the annual profits allocated for the investments under §1
  • 40% of the annual profits allocated for the investments under §2
  • 90% of the annual profits allocated for the investments under §3
  • In case of accumulation of investment measures both under §1 and §2, non-taxable income cannot exceed 70% of overall taxable income.
  • Profits excluded from taxable income shall be allocated to a special financial statement reserve, non disposable for five years.
  • The aforementioned fiscal benefits apply up to the investment value until the fifth year following that of the granted authorization (until the seventh year if overall investment exceeds 7,000,000 euro).
  • It is expressly forbidden to combine such benefits with any type of subsidised credit.