Circular No. 2023-02: Operational Provisions for the Application of Article 34 of Law No. 70/2004

CIRCULAR NO. 2023-02
OPERATIONAL PROVISIONS FOR THE APPLICATION
OF ARTICLE 34 OF LAW NO. 70/2004 (REQUESTS FOR PAYMENT INSTALLMENTS) AS AMENDED BY ARTICLE 5, PARAGRAPH 2 OF LAW NO. 132/2023

1 DEFINITIONS a. For the purposes of this Circular, the following terms are understood as:

• "Central Bank": the Central Bank of the Republic of San Marino;
• "tax notice": the document, in paper format, provided for by Article 18 of Law No. 70/2004, through which the Tax Collector notifies the debtor of their registration in the Register;
• "debtor": the subject to whom registrations in the Register of Taxes are attributable;
• "installment": an installment plan guaranteed, provided for by Article 34 of Law No. 70/2004 and subsequent amendments and integrations, or, for the so-called "Covid installments", by Legislative Decree No. 91/2020. Its concession is subject to the presentation of one of the guarantees provided for by Decree No. 39/2004;
• "Tax Department": Organizational Unit of the Central Bank that manages the Single Tax Collection Service referred to in Law No. 70/2004 and subsequent amendments and integrations;
• "guarantee": Article 6 of Regency Decree No. 39/2004 provides that the installment must be guaranteed for its entire duration by a bank guarantee signed in favor of the Central Bank or by another guarantee deemed suitable by it (mortgage).
  b. In the following text, the use of the above-described terms is highlighted in UPPERCASE.
  c. For all terms not subject to definition in paragraph a, reference is made to the definitions contained in Law 25 May 2004 No. 70.

2 DETERMINATION OF OPERATIONAL PROVISIONS FOR THE APPLICATION OF ARTICLE 34 OF LAW NO. 70/2004 a. The holder of TAX NOTICE/NOTICES for amounts not less than €2,000.00 may submit a request for INSTALLMENT to the TAX DEPARTMENT, attaching to the application the necessary documentation and any additional documentation that the DEPARTMENT may request. b. The INSTALLMENT is an installment plan guaranteed by a bank guarantee or mortgage.
c. The TAX DEPARTMENT, having assessed the conditions for access to the INSTALLMENT and verified the suitability of the GUARANTEE provided, prepares the specific agreement to be signed by both parties.
d. The INSTALLMENT may have a maximum duration of 120 months, the amount of the monthly installment must have a minimum amount of €100.00, and its due date must be understood as fixed on the last day of each month. e. The INSTALLMENT is deemed forfeited upon the non-payment of at least 3 installments, or upon the non-payment of even a single installment if at least 90 days have elapsed from the due date of the repayment plan.

f. In the event of forfeiture of the INSTALLMENT, the Tax Collector proceeds with coercive collection by enforcing the bank guarantee or, if it concerns an installment guaranteed by mortgage, through real estate attachment. In the latter case, the executive activity is preceded by:
1. a letter of formal notice intimating, within 60 days from receipt or notification thereof, the payment of the outstanding debt of the tax notices subject to the installment and the related interest calculated as of the date of the actual settlement;
2. the evaluation by the Tax Collector of alternative executive procedures, taking into account the amount of the debt and the economic-financial situation of the DEBTOR. In order to allow such evaluation, in addition to access to the relevant data of the Public Administration, the Tax Collector, for the collection of the tax credit, may request from the DEBTOR the necessary and useful information to verify their income and asset situation to also evaluate other solutions proposed by the same within the payment term. Should no alternative methods for coercive collection emerge from the documentation referred to in Article 5, paragraph 1, letters a) points 1 and 2, and from any additional information provided by the DEBTOR, the Tax Collector will proceed with real estate attachment, followed by valuation by the Technical Office of the Land Registry pursuant to Article 56 of Law 70/2004.
g. The TAX DEPARTMENT cannot proceed with the enforcement of the MORTGAGE GUARANTEE when this concerns the residence property of the DEBTOR's family unit. For this reason, prior to the signing of the agreement, the Tax Collector verifies the existence of another property owned by the DEBTOR that is not a residence and is authorized, in the affirmative case, to register a mortgage on the non-residence property, unless it can guarantee the residual debt with the residence property, if the first is not sufficient. The benefit of non-enforcement of the residence property, however, finds exceptions in the following cases:
1. whenever the property subject to mortgage is of class A1;
2. whenever ownership occurs in favor of the DEBTOR or a member of their family unit of another property to be used as a residence. In the latter case, the Tax Collector limits itself to verifying the mere ownership of the property, without checking its actual availability.
It is also specified that the benefit of non-enforcement finds exception whenever the property given as GUARANTEE belongs to a third-party guarantor. h. The expenses related to the ongoing execution are borne by the debtor.
i. Pursuant to paragraphs 4 and 5 of Article 5 of Law No. 132/2023, the INSTALLMENTS referred to above may be subject to restructuring in the following cases:
1. INSTALLMENTS having up to 2 unpaid installments;
2. INSTALLMENTS forfeited as having at least three unpaid installments or even a single unpaid installment provided that, in the latter case, 90 days have elapsed from the due date of the repayment plan.
j. The INSTALLMENT, even when forfeited, may be restructured only once. The notices subject to a restructured installment cannot be subject to further installment plans. k. The RESTRUCTURING may also be requested by those who have signed installments pursuant to Legislative Decree 26 May 2020 No. 91, provided that a suitable GUARANTEE is presented.
l. The regularity of the INSTALLMENTS is also relevant for the purpose of verifying the prerequisites for the granting of payment promises referred to in Article 34-bis of Law No. 70/2004, under the following terms: before granting new payment promises, the Tax Collector verifies that all repayment plans of the applicant, guaranteed and non-guaranteed, are regular. Access to new payment promises will be subject to the regularization of existing irregular plans and/or the payment of the entire outstanding debt of plans forfeited for irregularity.
m. On the Central Bank website, the summary of tariffs for the services provided by the TAX DEPARTMENT is published, including those of the present Circular.