Representatives of the Unione Sammarinese Lavoratori (USL) and Italy’s Vice-Minister of Finance, Maurizio Leo, met on 29 September in San Marino to break the deadlock over dual taxation of pensions paid to some 6,000 former Italian cross-border workers. The encounter follows years of legal disputes triggered by the Italian Revenue Agency, which has issued back-tax assessments arguing that pensions earned in San Marino must also be declared in Italy. Both governments agreed to set up joint technical tables in the coming weeks to review Article 18 of the 2014 bilateral tax treaty. Rome is seeking a “concurrent taxation” clause that would allow Italy to levy a top-up tax while granting a credit for tax already paid in San Marino; the micro-state is pushing for exclusive taxation at the place of residence. Union officials welcomed the opening but demanded an immediate moratorium on collection procedures while negotiations proceed. They point to recent Italian Supreme Court rulings that interpret “social-security pensions” broadly, potentially exempting the payments from Italian tax. The unions also noted that Italy has already reached favourable settlements with frontier workers retired from Switzerland and Monaco, urging parity of treatment. For mobile employees and corporate HR teams, the outcome could set a precedent for the tax treatment of multi-pillar pensions accrued in micro-states and special jurisdictions. Employers with staff on assignment in San Marino—or considering secondments to support its fast-growing fintech sector—should monitor treaty revisions closely, as withholding and payroll-reporting obligations may shift rapidly once a new protocol is signed. The Finance Ministry has indicated that the talks aim to conclude before the 2027 budget cycle. Until then, advisers recommend that affected retirees file protective claims to suspend enforcement and that current workers keep meticulous records of contributions in both systems.
Source: Unione Sammarinese Lavoratori
