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The Exchange of Tax Information Portal is an initiative of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The Global Forum conducts peer reviews of its member jurisdictions' ability to co-operate with other tax administrations in accordance with the internationally agreed standard. The standard provides for exchange of information on request where it is foreseeably relevant to the administration and enforcement of the domestic tax laws of the requesting jurisdiction. Effective exchange of information requires that jurisdictions ensure information is available, that it can be obtained by the tax authorities and that there are mechanisms in place allowing for the exchange of that information. The Global Forum's peer review process examines both the legal and regulatory aspects of exchange (Phase 1 reviews) and the exchange of information in practice (Phase 2). The EOI Portal will track the development of these peer reviews, including changes that jurisdictions make in response to the Global Forum's recommendations.

Peer Review: Phase 1 Peer Review - San Marino

This report for San Marino has been published on 27 Jan 2011. You can buy this report, or browse it online below.

Skip directly to the Executive Summary. You may also want to view the tables of determinations and ratings.


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Determinations and Recommendations

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is not in place.   Other than for foreign companies, the requirement that entities formed outside of San Marino but having their place of effective management in San Marino maintain ownership information or provide it to authorities is unclear.  San Marino should address the lack of clarity in its laws to make it explicit that, in addition to foreign companies, all foreign entities having sufficient nexus to San Marino are required to maintain information on their ownership. 
The obligations on fiduciary companies registered in San Marino that have shareholdings in foreign companies to disclose to the authorities information identifying the person(s) for whom they act are unclear and only those persons in the ownership chain who hold more than 25% interest in the fiduciary company’s client must be identified.  Provisions should be established to ensure that San Marinese fiduciary companies having shareholdings in foreign companies maintain the information identifying the person(s) for whom they act and that all fiduciary companies maintain information on all persons in the ownership chain behind their clients. 
There is no obligation to identify the beneficiaries of trusts unless they hold more than a 25% interest in trust property.  San Marino should establish clear provisions in its laws to ensure availability of information on all beneficiaries of trusts. 
The Company Law does not prescribe any sanctions for failure by companies or partnerships to keep ownership information.   San Marino should prescribe enforcement provisions in the form of penalties for companies and partnerships which do not maintain information in accordance with the Company Law. 
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is not in place.   There is lack of clarity concerning the obligations on foreign partnerships carrying on business in San Marino to maintain accounting records in San Marino.  San Marino should clarify the requirement for foreign partnerships that carry on business in San Marino to maintain accounting records and underlying documentation. 
Businesses achieving revenue less than EUR 800, 000 are allowed to keep accounts in the simplified form for the reference year and two subsequent years. The keeping of accounts in simplified form does not meet the international standards.  San Marino should provide that all entities maintain proper accounting records and underlying documents consistent with the international standards. 
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is not in place.   The CLO can access information in criminal tax matters only.   The CLO should be granted powers to access information in all tax matters, including civil tax matters. 
The CLO relies on the OCSEA, Tax Office and other public bodies for obtaining information. Uncertainties remain in the powers of these authorities to obtain information from all relevant entities and arrangements for the purpose of international requests for information.  The relevant authorities on which the competent authority relies for obtaining information should be granted the well defined powers to obtain information in the possession or control of all persons within San Marino’s territorial jurisdiction for the purpose of international requests for information. 
The Tax Office cannot obtain information more than three years old.  The Tax Office should have powers to obtain all available information necessary for the purpose of international exchange of information. 
The Law does not unequivocally provide that the Tax Office is empowered to obtain information to meet the requests from CLO in absence of a domestic tax interest. The use of term “control” and “taxpayer” without defining scope of these terms creates uncertainties.  San Marino should make appropriate amendments to the Tax Law explicitly providing the Tax Office with powers to obtain information in all cases to assist the CLO to meet international requests for information. In doing so, it should consider defining the scope of various terms like “tax payer” and “control”. 
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   The scope of professional secrecy for lawyers and notaries is wide (not limited to giving of advice or conduct of legal proceedings) and not compatible with the effective exchange of information.  It is recommended that provisions be put in place to reduce the scope of the professional secrecy of lawyers and notaries so this does not unduly prevent or delay the international exchange of information for tax matters. 
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is not in place.   San Marino’s tax treaty with Italy, which was signed 8 years ago, is not yet in force.  San Marino should take all the necessary steps on its side to bring this agreement into force expeditiously. 
Three of San Marino’s 29 double tax conventions do not provide for exchange of information to the international standard.  It is recommended that San Marino bring these arrangements up to the international standard. 
San Marino’s arrangements providing for international exchange of information have not been given effect to through domestic law as there are important limitations on the authorities’ powers to obtain necessary information for the purpose of international information exchange.   It is recommended that San Marino enact necessary legislation to remove various deficiencies noted in this report, which will enable it to comply with and give effect to its EOI agreements. 
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   The exchange of information mechanism with Italy, San Marino’s most relevant partner, is not in force and does not provide for exchange of information to the standards.  San Marino should enter into an agreement for the exchange of information with Italy. 
13 of San Marino’s 29 agreements are in force and appear to provide for effective exchange of information.  San Marino should continue to develop its EOI network with all relevant partners. 
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.      
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.