The Ministry of Finance and Budget leads the efforts in aligning the Republic of San Marino with the international tax standards proposed and jointly updated by the Organisation for Economic Co-operation and Development (OECD). San Marino resources are mainly coordinated by the Department of Finance and Budget, through a constant dialogue with OECD counterparts, in order to facilitate the maintenance of the country's reputation in a process focused on transparency and international cooperation.

The following are the relevant steps undertaken by San Marino within the international community, in coordination with the OECD headquarters in Paris.

>> By letter of 21 June 2016 (Ref. 67877), the then Minister of Finance and Budget, Gian Carlo Capicchioni, informed the OECD Secretary-General, Angel Gurria, that the Republic of San Marino had joined the BEPS (Base Erosion and Profit Shifting) project. By doing so, San Marino has officially become a member of the Inclusive Framework established by the OECD/G20 members in response to the call of the G20 Leaders in November 2015, which includes nearly 150 jurisdictions working together on an equal footing to implement the BEPS package. See the full list of members of the OECD/G20 Inclusive Framework  here.

>> The work carried out is mainly supported by the adherence to a minimum action plan, called Minimum Standards (M.S.), included in the so-called BEPS (Base Erosion and Profit Shifting) project of the OECD, which aims to combat tax abuse. Such phenomenon can arise as a result of tax avoidance operations, mainly carried out by multinational groups that manage to "erode" the tax base and shift their profits from high-tax jurisdictions to low-tax or non-tax jurisdictions. In particular, the Action Plan (Actions) is aimed at:

• countering harmful tax practices more effectively by taking transparency and substance into account, with the adoption of the BEPS Action 5 minimum standard;
• preventing tax treaty abuse, by adopting the BEPS Action 6 minimum standard;
• introducing mandatory country-by-country reporting for certain companies belonging to multinational groups that meet specific criteria, by adopting the BEPS Action 13 minimum standard;
• introducing the principles on the management of tax disputes subject to mutual agreement procedures (‘MAP’), governed by the new Article 25 of the OECD Model Tax Convention on Income and on Capital (“OECD Model”), by adopting the BEPS Action 14 minimum standard;
• allowing for the simultaneous amendment of existing double tax treaties to bring them into line with the BEPS principles, by adopting the BEPS Action 15, through the signing of the OECD BEPS Multilateral Convention (MLI).

The implementation of the BEPS minimum standards and the consequent positive assessment of the transposition of the standards of the various actions allow the Republic of San Marino to present itself to the international community as a transparent and aligned jurisdiction, distinguishing itself from those countries which, being categorised as "non-cooperative for tax purposes", are not attractive to investors interested in seriously developing their business.

For this reason, the Republic of San Marino will continue to promote and coordinate its actions in the field of international taxation in order to attract international investments with more solid characteristics to the strategic sectors of the Republic of San Marino, rewarding the virtuous behaviour of companies in terms of research, employment, development and reinvestment of profits.

In 2021, San Marino also adhered to the Outcome Statement on the two-pillar solution to address the tax challenges arising from the digitalisation of the economy, defining a common political agreement among the adhering jurisdictions on the key components of the first and second pillars and mandating the Task Force on the Digital Economy (TFDE) to carry out the necessary work to implement all the criteria required to clearly define the scope of both pillars.