CERTIFICATE OF PAID TAX AND CONTRIBUTIONS PPP-PO FORM
The current tax and legal environment for operating a business in Serbia, which still does not include a form of synthetic tax, but a modified schedular tax system, imposed on all income payers the obligation to issue a certificate of paid withholding tax and contributions to every natural person, who had their income (based on withheld taxes and contributions) calculated and payed out.
Withholding tax implies paid individual income tax and social insurance contributions.
PPP-PO certificate is a form for entering the data on paid income and withholding taxes and contributions (if there is the obligation to pay contributions for that income type) during one calendar year i.e. in the period from January 1 to January 31, 2021, regardless of the payment period. This means that if you, as a natural person, receive a wage based on outstanding 2020 wages in 2021, the employer shall issue a certificate confirming the payment of those outstanding wages in 2021.
The element relevant for the certificate of paid tax and contributions is the moment of payment, not the period of the paid income.
This is a legal obligation of every income payer as a tax payer, regulated by the Article 41 of the Law on Tax Procedure and Tax Administration, at the end of a calendar year but not later than January 31.
The form of the PPP-PO certificate is stipulated by the Rulebook on Withholding Tax Return.
Also, the provisions of the Article 106 of the Individual Income Tax Law, stipulate that the payer of the income on which the withholding tax is paid shall make a calculation containing the following data and give it to a tax payer at the moment of every payment as well as at the end of a year:
– gross taxable income from employment and business
– standard costs and other reductions in taxable income
– tax base
– amount of paid tax
– amount of paid contributions debited to the income recipient and payer.
Why is this certificate important to every natural person who generates income in Serbia?
Because natural persons, as income recipients, use this certificate as an attachment to the annual individual income tax return.
The certificate i.e. PPP-PO form, enables every natural person as an income recipient to get accurate data on gained income and the taxes and contributions paid in a specific year. This is very important for those natural persons who gain higher income and represent potential payers of the annual individual income tax or are entitled to a refund of overpaid pension and disability insurance contributions because they paid the contributions calculated for a base higher than the highest base prescribed by the law, which is checked by summing all certificates issued in their name by different income payers.
Misdemeanour liability of an income payer, who paid withholding tax but did not issue the certificate to the income recipients not later than January 31 of the current year for the previous calendar year, is stipulated by the Law on Tax Procedure and Tax Administration.
For legal entities, the Law stipulates a fine ranging from 100,000 to 2,000,000 dinars and for an authorized person of the legal entity, a fine ranging from 10,000 to 100,000 dinars. An entrepreneur shall be fined in an amount ranging from 50,000 to 500,000 dinars for the same misdemeanour.