CSdL 8220DES San Marino does not lend itself to welcoming those who do not pay taxes in its country8221

"After hearing the discussion in the Council, I have the impression that DES is even worse than I thought.". On the occasion of the final episode of "CSdL Informa," the CSdL Secretary Merlini began by commenting on the Special Economic District.

"Several council members, including the majority, have emphasized that the project is centered on a single individual, who will actually have complete control over the management of an investment that, when fully operational, will total 300 million euros, which is equal to the state budget net of round matches. "The first issue, as Merlini pointed out, is that we are unsure of the nature of this project.

I remind you that the votes of two thirds of the Council are required for the State to be able to transfer public land; therefore, we ask ourselves a number of questions such as: what investments would be made; what properties would be used; the lands of the State or some valuable areas, such as in the historic center, are they part of the areas designated for DES; and how can we think of transferring some of these assets to an external entity with a simple resolution of the Finance Committee. It is not possible for the law to be passed first and then, after the interested party presents the project, which involves several different areas of the territory and calls for the construction of 1,000 rooms overall, the law to be implemented.

The reasoning provided is absurd when it comes to the claim that the proposed concessions, particularly the 5 percent rate, would not clearly amount to unfair competition against the entire business system. Alternatively, since the majority of businesses do not pay any taxes because they are losing money or report very little revenue, charging 5 percent would already be a success. The DES project, according to the CSdL Secretary, "is aimed at attracting certain subjects, who are not ordinary tourists, but people who could stay for no more than 5 months a year, through this special non-domiciled tax residence system. They are unlistenable motivations; it is the umpteenth admission of politics which blatantly declares that it does not want to make tax evaders pay! It's a shame for me!".

Furthermore, I don't believe that it is necessary for these people to actually reside in San Marino during the selected time. Wealthy people would find themselves paying only the "facilitated" taxation provided for in each individual legal system and not the ordinary one on a worldwide basis in the actual country of residence because there are other systems like this in other parts of the world. This is the philosophy of tax systems applied in all Western countries, including the United States, and they would find themselves paying only the "facilitated" taxation provided for in each individual legal system.

With the DES, we could establish ourselves as a benchmark for wealthy individuals using these strategies to access preferential tax treatment. Evidently, a significant portion of politics is still motivated by the idea that our nation can make easy money, and this is because it would still be a legal strategy.

Additionally, the financial impact should not be understated: in the future, we might find ourselves surrounded by unusual retirees, well-known athletes, and non-domiciled tax residents, all of whom are using the San Marino system to avoid paying taxes in their home countries—certainly not because they think San Marino is the best place to live, work, or do business. "On the one hand," Merlini concluded, "our State is preparing, as I hope, to sign the association agreement. Davide Siliquini, a representative of FULI, continued by recounting the history of San Marino's taxation of the pensions that former frontier workers receive.

"Some retired former frontier workers have gotten in touch with us because the Revenue Agency has been disputing their taxes for a few years because they deducted the taxes they paid to San Marino from the pension that was provided by our State. It should be emphasized that there is a specific agreement against double taxation between San Marino and Italy that was signed in 2012 in response to this unilateral interpretation by the Revenue Agency.

Upon reading the agreement, it is clear that the pension provided by the ISS is covered by the social security system therein, and that it is higher than the contributions made, given that the salary calculation is in effect in San Marino. Therefore, it is evident to us based on the agreement that the pension must be taxed in the nation from which it is paid.

We have requested that the respective institutional bodies of the two countries convene at a discussion table set up under the same convention through the CSIR in order to resolve this issue, which cannot be placed on the shoulders of retired frontier workers. We have also brought up the issue of consistency of treatment, recalling the provisions Italy adopted for retired former employees in Switzerland and those living near the Principality of Monaco, with a tax rate of 5%; it is necessary to offer similar concessions also for employees who have worked in San Marino, in order to avoid inappropriate and unjust discrimination.

Secretary Merlini concludes by saying, "It seems to me that this is a diplomatic problem of no small importance because, in actuality, the Revenue Agency believes that our nation is making a withholding tax arbitrarily. This is too important to be understated, in my opinion, and the government needs to ask the relevant Italian institutional representatives for an explanation right away.

Last but not least, we would like to remind you that you can view all of the CSdL Informa episodes on either the Confederation website, www., or the "Cuore CSdL" YouTube channel. the sm at csdl.