PP OD-O Tax Returns Submitted Ex Officio – What Companies Need to Know

The Tax Administration of the Republic of Serbia has issued a notice regarding the submission of tax returns for calculated contributions to mandatory social security for founders or members of companies, using form PP OD-O, submitted ex officio.

According to the provisions of the Law on Contributions for Mandatory Social Security, the contribution base for founders or members of a company cannot be lower than the minimum monthly contribution base. The calculation and payment of contributions are performed solely by the company, no later than the 15th day of the month for the previous month.

This obligation applies to founders who are not employed under a labor contract in their own company but are working there. On the other hand, if a founder is employed in their company, contributions are paid upon salary disbursement, in the same manner as for other employees.

In accordance with the Law on Tax Procedure and Tax Administration, the Tax Administration has the right to submit a tax return ex officio in cases where the taxpayer fails to submit it independently.

However, if the company has submitted tax returns and fulfilled its obligations properly, and the Tax Administration still submitted PP OD-O tax returns ex officio, the company has the right to submit the ZIG form to cancel such returns, as they were submitted without justification.

Additionally, if the Tax Administration submitted returns with errors or incorrect calculations, the company may submit amended tax returns.

If the PP OD-O tax returns were submitted ex officio correctly — that is, if the company had not previously submitted returns or paid contributions for the founder — the company is obliged to make the contribution payments based on those returns.

This situation usually occurs when the founder works in the company:

• under a contract on the rights and duties of a director, or
• under a supplementary work contract (with another basis of insurance and another employer),

where a remuneration is paid on which, after deducting standardized expenses of 20%, 20% income tax and 24% pension contributions are paid, but no additional pension contribution is paid on the minimum monthly base via form PP OD-O.

Our Advice
We recommend that all companies check the following:

• whether contributions for founders have been paid in accordance with the Law on Contributions,
• whether the appropriate tax returns for founders have been submitted,
• whether founders are correctly registered in the CROSO system with the appropriate insurance code.

Timely verification and any necessary corrections can help avoid additional tax liabilities, interest, and other undesired consequences.

Please contact us for further information and professional support.