Corporate Income Tax in San Marino

Tax year: the company's tax period in 2026 (calendar year for most companies). Currency EUR. Authority: UO Ufficio Tributario (Tax Office).

Law 141/2025 reformed IGR from tax year 2026 (Law 141/2025, art 54(1)); Delegated Decree 156/2026 of 12 October 2026 amended it again from tax year 2026 (DD 156/2026, art 19). The official coordinated IGR text (updated to 22 December 2025) includes Law 141/2025 but not DD 156/2026.

1. Who this applies to

• Resident legal persons and assimilated entities pay IGR on worldwide income. A legal person is resident if its registered office (sede legale) or its place of effective management is in San Marino for most of the tax period (IGR art 42(1)-(2)).
• Non-resident legal persons pay IGR on San Marino-source income listed in article 5, including business carried on through a San Marino permanent establishment (IGR arts 4-5, 42(1)(f)).
• Partnerships are transparent: profit is attributed to partners (IGR art 10(3)). Sole traders and professionals use sm-income-tax (18% separate rate).

Out of scope: special regimes for banks, insurers and financial companies, reorganisations, insolvency (changed by DD 156/2026, arts 13-14) and technology-company regimes.

2. Rates, bands and thresholds

Item	Amount	Tax year	Source
Corporate IGR rate, tax years 2026 to 2030	18% of taxable income	2026	Law 141/2025, art 54(6)
Statutory corporate rate (applies again from 2031 unless changed)	17%	2026	IGR art 43(1); Annex C, art C2
Loss carryforward	No time limit; use capped at 70% of taxable business income each year	2026	IGR art 46(5)
New-activity incentive (qualifying new company)	50% cut in the rate for the first five tax periods: 9% in 2026	2026	IGR art 73(1)(c), (2); Law 141/2025, art 54(6)
New-activity licence-fee relief	No first licence fee; no annual licence fee for the next three years	2026	IGR art 73(1)(a)-(b)
Own-capital (equity) increase deduction	10% of the year's increase in own capital, net of the year's result; unused amounts lapse	2026	IGR art 74(1)-(3)
Accelerated depreciation (tangible assets, not buildings)	Allowed in the first two tax periods, at most 20%	2026	IGR Annex D, art D3(3)
Higher depreciation for intensive use or obsolescence	Up to 50% above the ordinary coefficient, buildings excluded, only after a ruling request to the Tax Office	2026	IGR Annex D, art D3(1)-(2)
Intangible assets	Up to 20% a year	2026	IGR Annex D, art D4(1)
Advertising and sponsorship costs	Deductible up to 8% of operating revenue	2026	IGR art 50(1)(a)
Data-processing and market-research costs	Deductible up to 10% of operating revenue (not for banks and financial operators)	2026	IGR art 50(1)(b), (3)
Entertainment (rappresentanza) costs	Deductible up to 5% of operating revenue	2026	IGR art 50(1)(c)
Cars and motorcycles not used directly as business assets, not for public use and not assigned to employees for mixed use	60% of costs deductible; purchase cost counted up to 50,000 per car and 10,000 per motorcycle	2026	IGR art 50(4-bis); DD 156/2026, art 20(1)
Dividends from non-resident companies	95% excluded from income if the holding is kept 12 months without a break (the period can be completed after the distribution) and shown in the accounts and at least one balance sheet	2026	IGR art 59(1)-(2)
Dividends from resident companies	Fully excluded from income	2026	IGR art 59(3)
Gains on shareholdings	Exempt if held from the first day of the 12th month before disposal and booked as financial fixed assets in the first balance sheet; 50% exempt for San Marino real-estate companies	2026	IGR art 56(1)-(3)
Hiring credit	IGR credit of 10% (prior-year average under 5 employees) or 5% (5 or more) of the tax for each unit of increase in average staff, at least half hired from the job-placement lists; capped at 25% of the tax; suspended when the prior year's average unemployment rate is under 3%	2026	IGR arts 69-70; DD 156/2026, art 12
First advance	35% of prior-year IGR (net of foreign tax credits on business income), by 31 August	2026	IGR art 124(2)
Second advance	55% of the same basis, by 30 November	2026	IGR art 124(2)
Return and balance	31 July following the tax year	2026	IGR arts 93(1), 124(1)
Late payment interest	Legal rate plus 2 points	2026	IGR art 128(2)

3. The base

1. Start from the accounts. Taxable income is business income determined under Title III from complete accounts and fiscal records, with income and costs in the correct period (IGR arts 45-48). An unrecorded receipt is still taxable; a capital asset is depreciated, not expensed when paid.
2. Disallowed costs. Income taxes, related tax penalties and interest, and costs of criminal activity are not deductible; directors' pay is deductible under its payment rule (IGR art 49). Article 50 caps advertising at 8%, data processing at 10% and entertainment at 5% of operating revenue (not where these costs are the company's core business); a ruling request by 31 March of the following year can lift the caps. DD 156/2026 repealed the full deduction for agents' cars in article 50(4-bis)(b), so for companies those cars now follow the other article 50(4-bis) categories (60% unless used directly as business assets) (IGR art 50; DD 156/2026, art 20(1)).
3. Depreciation and provisions. Use the Annex D coefficients by asset group, recorded in the depreciable-assets register. Depreciation starts in the first period the asset is used or usable, at the full annual rate regardless of month. New companies can start depreciation in the first period with revenue (IGR Annex D, arts D1-D3). Non-capitalised research and advertising costs are deductible in the year or spread over that year and the next three (IGR Annex D, art D4(4)).
4. Related parties. Dealings with companies that control, are controlled by or share a controller with the taxpayer are valued at normal value where that increases income (IGR art 46(4)). Use sm-transfer-pricing.
5. Shareholdings. Dividends from resident companies are excluded; 95% of dividends from non-resident companies are excluded after a 12-month holding, and related costs stay deductible. Gains on qualifying holdings are exempt (50% for San Marino real-estate companies) (IGR arts 56, 59).
6. Crypto-assets. Year-end valuation gains and losses on crypto-assets do not count in income, whatever the accounting entry (IGR art 46(5-bis)).
7. Incentives. The 10% own-capital deduction uses the year's increase in own capital, excluding the year's result, retained-earnings reserves made under Title IV Chapter I and legally required reserves. If shareholders later reduce capital other than for losses, the benefit is repaid in proportion (IGR art 74).
8. Losses. Documented tax losses carry forward without time limit and can absorb at most 70% of the year's taxable business income (IGR art 46(5)). Keep a schedule by year of origin.
9. Tax. Apply 18% to the result. Then deduct foreign tax credit (section 6), advances paid and tax withheld on account (IGR art 124(3)).

New-activity incentive conditions

The 50% rate cut applies to a newly formed capital company whose shareholders and beneficial owners have not carried on a similar business in the twelve months before the request, and which hires at least one full-time employee (a full-time director counts) within six months of authorisation to operate and a second within 24 months (IGR art 73(2)). The cut runs for the first five tax periods; the company can defer the start to no later than the first period after the one in which the new activity starts (IGR art 73(1)(c)). It applies only on the company's option (IGR art 73(4)). Losing a condition (including through a share transfer) ends the benefit for the current and later periods (IGR art 73(2), (5)). Intangible-asset businesses are also subject to Decree-Law 76/2018 (IGR art 73(6-bis)). For 2026 the cut applies to the 18% rate, giving 9%.

4. Deadlines and filing

Obligation	Deadline	Source
Annual electronic return, transmitted by 24:00	31 July following the tax year (31 July 2027 for 2026)	IGR art 93(1), (4)
Balance of tax	Same date as the return	IGR art 124(1)
First advance (35%)	31 August of the tax year	IGR art 124(2)
Second advance (55%)	30 November of the tax year	IGR art 124(2)
Withholding remittance as payer	By the two-month period after the one in which tax was withheld	IGR art 125(1)

Advances are not due if the activity is suspended or ceased before the due date (IGR art 124(2)). Amounts owed can be set off against IGR, import-tax or other Tax Office credits on the taxpayer's fiscal account (IGR art 126). Keep the payment receipt until the assessment period ends (IGR arts 124(1), 127).

A return filed within 30 days after 31 July is valid with the late-filing charge; a later return is null and cannot support a refund claim, though tax shown on it can still be collected (IGR art 93(2)-(3)).

5. Penalties and interest

Item	Amount	Source
Late return (art 137(2)(a))	400	IGR art 139(1)(d), replaced by DD 156/2026, art 16
Late return filed within 30 days of the deadline	200	DD 156/2026, art 16
Late payment interest	Legal interest rate plus 2 points, from the due date to payment; not charged on penalties	IGR art 128
Assessment paid within 60 days of notice	Penalties reduced by 50%	IGR art 129

Articles 138 and 139 set separate penalties for non-payment, late payment, failure to withhold and false or omitted returns (IGR arts 137-139).

6. Cross-border points

• Foreign tax credit. Final, non-refundable foreign tax on foreign income included in the base is credited up to the share of net San Marino tax that foreign income bears to total income, computed per State (IGR art 44). For income not earned through a foreign permanent establishment, foreign income for this fraction is total income x foreign gross receipts / total receipts (IGR art 44(8)).
• Permanent establishment. A construction or installation site is a San Marino permanent establishment only if it lasts more than three months (IGR art 4).
• Payments abroad. Withholding on dividends (5% to individuals), interest (13%), professional services (20%) and equipment rentals (10%): see sm-cross-border.
• International advance agreements on transfer prices, PE status and entry and exit values: Delegated Decree 116/2026, see sm-transfer-pricing.

7. Two worked examples that recompute

Example 1: ordinary company with brought-forward losses

Book profit 100,000; a 2,000 tax penalty was expensed and is added back; 90,000 of documented losses are brought forward. Pre-loss taxable income 102,000. Loss use is capped at 70%: 71,400. Taxable income 30,600; IGR at 18% = 5,508. Losses carried forward: 18,600.

name: San Marino 2026 corporate bridge with 70% loss cap
inputs:
  book_profit: 100000
  nondeductible_tax_penalty: 2000
  documented_unused_losses: 90000
  statutory_loss_limit: 0.70
  rate_2026: 0.18
steps:
  pre_loss_taxable_income: book_profit + nondeductible_tax_penalty
  annual_loss_ceiling: pre_loss_taxable_income * statutory_loss_limit
  losses_used: min(documented_unused_losses, annual_loss_ceiling)
  taxable_income_after_losses: pre_loss_taxable_income - losses_used
  ordinary_igr: taxable_income_after_losses * rate_2026
  losses_remaining: documented_unused_losses - losses_used
expected:
  pre_loss_taxable_income: 102000
  annual_loss_ceiling: 71400
  losses_used: 71400
  taxable_income_after_losses: 30600
  ordinary_igr: 5508
  losses_remaining: 18600

Example 2: qualifying new company, advances in the next year (edge case)

A new company meets every article 73 condition and has opted in. Taxable income 200,000. Ordinary IGR at 18% would be 36,000; with the 50% cut the rate is 9% and IGR is 18,000. In the following year its advances use 18,000 (no foreign credits) as the basis: 6,300 by 31 August and 9,900 by 30 November.

name: San Marino 2026 new-company half rate and next-year advances
inputs:
  taxable_income: 200000
  rate_2026: 0.18
  rate_reduction: 0.50
  first_advance_fraction: 0.35
  second_advance_fraction: 0.55
steps:
  ordinary_igr: taxable_income * rate_2026
  reduced_rate: rate_2026 * (1 - rate_reduction)
  reduced_igr: taxable_income * reduced_rate
  first_advance_next_year: reduced_igr * first_advance_fraction
  second_advance_next_year: reduced_igr * second_advance_fraction
expected:
  ordinary_igr: 36000
  reduced_rate: 0.09
  reduced_igr: 18000
  first_advance_next_year: 6300
  second_advance_next_year: 9900

The same rules give: a qualifying own-capital increase of 100,000 gives a 10,000 deduction that year only; with prior-year IGR of 20,000 less 2,000 foreign business-income credits, advances are 6,300 and 9,900, and a current-year IGR of 23,000 leaves a balance of 6,800.

8. Ask the client first

1. Registered office and where the board actually meets and decides, with dates.
2. Full accounts, fiscal ledgers, depreciable-assets register and any related-party dealings.
3. Loss schedule by year of origin, as shown in earlier returns.
4. Formation date, new-activity request and option, shareholders' and beneficial owners' prior activity, and hiring dates.
5. Prior-year IGR, advances paid and withholding suffered.
6. Foreign income and foreign tax paid, by State, with final assessments.

Sources

Source	URL	Read on
Law 166/2013 (IGR), official coordinated text updated to 22 December 2025: arts 4-5, 10, 42-50, 56, 59, 69-70, 73-74, 93, 124-129, 137-139, Annexes C and D	https://www.consigliograndeegenerale.sm/on-line/documento17086436.html	2026-10-30
Law 141/2025 of 12 November 2025, art 54 (commencement, 18% rate 2026-2030)	https://www.consigliograndeegenerale.sm/on-line/home/archivio-leggi-decreti-e-regolamenti/documento17155359.html	2026-10-30
Delegated Decree 156/2026 of 12 October 2026, arts 12-14, 16, 19-20	https://www.bollettinoufficiale.sm/on-line/RicercaBU?operation=getDocBU&id=9c3a0dfeb72a7aeab52d1c5c0440879b4cf2ad33	2026-10-30

Not yet confirmed: the 2026 legal interest rate; the full Annex D coefficient table by asset group; whether the 20% accelerated depreciation is on top of the ordinary coefficient (Annex D3(3) says only "at most 20%"); the current implementing circular for article 73; the 2027 return forms.