Capital Gains & Investment Income – San Marino

Crypto sold within 6 months of purchase: profits taxed as ordinary income at progressive rates (9-35%). Example: Buy €10,000 Bitcoin, sell 5 months later for €15,000 = €5,000 profit taxed at applicable bracket. Encourages long-term holding.

Crypto held 6+ months: completely tax-free when sold. No capital gains tax applied. Major advantage for long-term investors. Example: Hold Bitcoin 7 months, sell for any profit = €0 tax. Led to 15% increase in long-term crypto investments since 2023.

Mining and staking rewards taxed as business/self-employment income when received at fair market value. If occasional: progressive rates 9-35%. If professional activity: 17% corporate rate if structured as company. Can deduct electricity, equipment costs.

Delegated Decree no. 138 of 2024 provides full crypto regulation. Crypto fully legal and supported. Mining operations permitted. Business licenses available. Aligned with EU standards and MiCA compliance. Banking relationships crypto-friendly. Government actively promotes blockchain innovation.

Companies holding qualifying shares 12+ months AND reporting them as financial fixed assets since acquisition: capital gains completely exempt from tax. Must maintain both conditions. Encourages long-term business investment.

Shares sold within 12 months or not held as financial fixed assets: gains taxable. Companies: 17% corporate tax. Individuals: progressive income tax rates. Trading activity more heavily taxed than investment.

When companies reinvest 90% of capital gains into other intellectual property within 2 years, those gains become completely tax-exempt. Powerful incentive for IP-focused businesses and innovation economy.

Individual shareholders pay only 5% withholding tax on dividends. One of lowest dividend tax rates in Europe. Withheld at source by paying company. No additional tax at individual level. Final tax.

Corporate shareholders receive dividends completely tax-free. No withholding tax. Prevents cascading taxation. Encourages holding company structures. Participation exemption for qualifying holdings.

San Marinese holding companies holding shares 12+ months: pay tax on only 5% of dividends received from companies in Double Tax Agreement countries after foreign withholding tax. Effective tax rate: 0.85% (17% × 5%). Extremely favorable for international holdings.

Interest paid on loans granted to non-residents and individuals: 13% withholding tax at source. Applies to cross-border loans. May be reduced under tax treaties. Exemptions available for EEA companies under certain conditions.

Interest income from bond issues: subject to 4% withholding tax. Lower rate encourages bond market. Other investment income may be taxed differently depending on instrument type and residency.

Royalty payments subject to withholding tax. Rate depends on tax treaty provisions. San Marino has 23 Double Taxation Treaties (DTTs) based on OECD Model. Network of treaties prevents double taxation on cross-border IP income.