Private investments in the cultural sector, moderately encouraged from a legal point of view, are regulated by Law n. 91 of 1984 General Income Tax, subsequently amended and replaced by Law n. 9 of 1993. Article 6 of the General Income Tax Law stipulates that donations and gifts by natural persons may be deducted from taxation in the following amounts: if the donation or gift is made in favour of the Roman Catholic Church and non-profit cultural, social, recreational and sports associations, a tax allowance up to 1 500 EUR is granted; if the beneficiary is the State or other public entity, the whole amount is deductible.
Annual revenues of cultural associations include a 3‰ mandatory contribution from tax returns. Tax payers freely choose the entity or institution that will benefit from such contribution. If unspecified, the beneficiary will be the State.
Cultural investments made by foundations are not taxed; as non-profit entities they would normally not generate taxable income (see also chapter 1.3.3).
San Marino has no VAT regime on goods and services, unlike neighbouring Italy. Indirect taxation is levied in San Marino on imported goods and services at an average rate of 17%. This tax is a single-stage tax in that it is levied only once, when imported goods or services enter San Marino.
Under Government Decision n. 35 of 1995, artists are included in the unemployment schemes as professionals when in possession of a high school diploma. On the contrary, artists not having any diploma but only natural skills and talent are registered as self-employed. As self-employed, they do not have access to average income, flat-rate or agreed taxation schemes. Taxation rates for artists employed by the State are fixed according to income brackets.