Employment

• Law No. 71/2014 (and subsequent Law No. 115/2017 and Decree No. 119/2017) has introduced several meaningful incentives in support of jobs. The companies that employ workers from the labour mobility lists or that provide staff retraining, benefit from fiscal incentives up to 23% of the gross salary and in some cases such incentives apply also to social security tax contributions. Almost all the categories of working employees are entitled to benefit from the lower taxable base: a real promotion and re-launch of the economic system in the Republic.

  In order for the entrepreneurs who wish to set up their own company in San Marino in the next future, here we report some examples of the benefits that Law No. 71/2014 (and subsequent Law No. 115/2017 and Decree No. 119/2017) may provide to their San Marino-based business. The following examples are intended to be illustrative only, hence we recommend verifying them along with your accountant (please refer to the relevant law for any necessary clarification).

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• 50%

  contributory compensation for apprenticeship agreements

  23%

  Incentives for companies that employ working employees who receive unemployment benefits

Incentives for professional training apprenticeship

This incentive concerns the recruitment of young people between school age and 30 years old, who are unemployed for three consecutive months, unemployed workers that substantially change their previous working activity or their profession contrary to their title of studies. The duration of these incentives varies according to the level of framing: from 6-24 months, with an extension possibility up to 12 months (see applicable law for further details).

Tax incentives in support of jobs and unemployment benefits

This is the most important incentive introduced by Law No. 71/2014 (and subsequent Law 115/2017 and Decree No. 119/2017) and it concerns the employment of those who receive a special allowance or unemployment benefits. The state contribution amounts to max 23% of the employee’s contractual remuneration: to give you an idea, as illustrated below, a category 2 employee can be hired, for the first year, with a cost for the company about 300 euro and the social security contributions that are less 300 euro (for more details refer to the relevant law).

• To increase employment

  TO BE ENFORCED ON 1/1/2018

  At the economic operators, including freelancers, that hire employees from the start-up job list an IGR tax credit is recognized. In particular employers who in the considered fiscal year, compared to the previous year, increase an average number of employees equal to at least one unit (the 50% of which comes from the placement lists of San Marino) is entitled of a IGR tax credit equal to:

  • 5% of the tax due (up to 25%) for each increased unit, if the average number of employees in the previous year was greater than or equal to 5.
  • 10% of the tax due (up to 25%) for each increased unit, if the average number of employees in the previous year was less than 5.
  • Further 5% of the tax due (up to 40%) in case of employment of unemployed, or women post-maternity or persons with disabilities equal to or greater than 40%.

• Tax incentives for newly established companies

  Companies that start their investment project with partners who didn’t run a business in San Marino in the previous year, and hire an employee within 6 months (who could even be the administrator) and a second employee within 24 months, are entitled to the following benefits:

  • Exemption from payment of the license first-issue and renewal tax for the first 3 years of business activity .
  • Income tax amounts to 8.5% for 5 years (applicable within 3 years of business activity).
  • Tax credit on staff training, technological innovation and development programmes.