San Marino personal-tax residence and scope

Three alternative residence connections

An individual is resident for income-tax purposes if registered as resident for most of the tax period, actually staying in San Marino for most of that period, or having their centre of vital interests there. The third alternative is not expressed as a majority-of-days test. Vital interests encompass the predominant economic, property, social and family connections; the ordinary tax period is the calendar year.

Resident foreign income

The general income tax covers residents' income from any source, in cash or in kind, including foreign income. The taxable base nevertheless excludes income that is exempt, separately taxed or subject to final withholding under the law. Foreign-source income therefore cannot be treated as categorically outside San Marino tax.

Non-resident source rules

Non-residents are taxed on income defined as produced in San Marino. The categories include local real estate, business through a local permanent establishment, and employment remuneration paid in San Marino or abroad by resident persons. The statute also has specific rules for self-employment, capital income, pensions and royalties, with exclusions for certain financial income; physical work location alone is not a complete source test.

Foreign-tax credit conditions

When foreign income is included in the tax base, qualifying foreign taxes paid definitively and not refundable can be credited, subject to the San Marino tax attributable to that foreign income. The calculation is separate for each foreign country. The law denies the credit if the return is omitted or the foreign income is not declared; particular business and professional-income provisions also require checking.

Income class and treaty interaction

Specified foreign dividends and foreign bond or bank interest may fall within an elected separate-taxation treatment rather than the ordinary combined base. The law also states that its domestic provisions apply where more favourable than a double-tax treaty. These provisions require income-class and treaty-specific assessment; neither establishes a universal foreign-income exemption.