Capital Gains Taxation in San Marino
San Marino's capital gains tax system is designed to tax profits realized from the sale or disposal of capital assets. The legal framework governing this taxation is outlined in Article 10 of the Income Tax Law (Legge sull'imposta sui redditi), which defines capital gains as the difference between the selling price and the acquisition cost of an asset.
Definition of Capital Gains
Capital gains in San Marino are defined as any profit derived from the disposal of capital assets, including:
- Real estate properties
- Stocks and securities
- Bonds and debentures
- Business assets
There is no distinction made between short-term and long-term capital gains for tax purposes.
Calculation of Taxable Capital Gains
Taxable capital gains are calculated as the difference between the selling price of the asset and its acquisition cost. The formula for calculating capital gains is as follows:
Capital Gain = Selling Price - Acquisition Cost
Adjustments or deductions may be allowed in the calculation of the gain, including expenses related to the sale (e.g., brokerage fees, legal fees) and any improvements made to the asset during ownership.
Tax Rates
Capital gains in San Marino are taxed at a flat rate of 5%. This rate applies to all categories of capital gains, regardless of the holding period or the nature of the asset disposed of.
Legal Framework
The taxation of capital gains in San Marino is governed by the following articles of the Income Tax Law:
- Article 10 defines capital gains and outlines the methodology for calculating taxable capital gains.
- Article 11 specifies the tax rates applicable to capital gains.
These provisions aim to ensure that individuals and businesses contribute their fair share of tax on profits realized from investments and asset disposals. By applying a flat tax rate to capital gains, San Marino seeks to maintain a neutral tax treatment across different sources of income and promote investment while generating revenue for the government.
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