Who Can Claim a Refund of Overpaid Pension Insurance Contributions

Insured persons of mandatory pension insurance whose salary payers, payers of other income, and themselves as self-employed individuals paid contributions for pension insurance in 2022 on a base exceeding 686,664 kuna can check if they are entitled to a refund of part of the contributions for generational solidarity pension insurance (first pillar).

If, according to all bases for generational solidarity pension insurance, more than 137,332.80 kuna was paid for a person insured only in the first pension pillar or more than 102,999.60 kuna in contributions for a person insured in the second pillar, the insured person can submit a request to the Tax Administration competent according to their residence for the annual contribution calculation and request a refund of contributions paid above the highest annual base.

How to Submit a Request

The request for the annual contribution calculation can be submitted in free form, or it can be on the form available on the Tax Administration’s website. A mandatory attachment to the request is one or more GOD-DOP forms issued to the insured person at their request by the income payers subject to contribution obligations. The form is prescribed by the Contributions Regulation. Salary payers and other income payers, as well as payers of other income and author fees, are obliged to fill it out and deliver it to the salary recipient or the recipient of other income if requested.

According to the instructions of the Tax Administration, for 2022, all financial data in the GOD-DOP form is reported in kuna, which implies the obligation to convert income from salary and amounts of contributions calculated and paid from January 1, 2023, from euros to kuna. According to this rule, the salary for December 2022 paid in January 2023, severance payments paid in 2023 for termination of employment in 2022, which were subject to contribution obligations, bonuses, and all other income considered salary, paid in euros, must be converted into kuna so that the base and paid contributions for insurance conducted in 2022 are reported in kuna. In the same way, the GOD-DOP forms for previous years for which contribution obligations were calculated and paid after January 1, 2023, after the change of the national currency, are filled out in kuna. For income from other income and author fees attributed to the annual base of the calendar year in which they were paid, payments made in 2022 are reported in the GOD-DOP form in kuna as they were also made in kuna. The same GOD-DOP form is used to report data for salaries and for paid amounts of other income, only in separate sections.

How It Is Calculated

The Tax Administration annually calculates contributions for generational solidarity pension insurance by verifying data on bases and paid contributions reported in the GOD-DOP forms attached to the request, summing all bases on which contributions for pension insurance were paid for the insured person. If the insured person has paid contributions for the relevant year on some basis, e.g., on other income received from abroad, as a craftsman, freelancer, either as a self-employed person or based on performing another activity, the tax authority will take into account all bases on which contributions were paid and determine whether contributions for insurance in the relevant calendar year were paid above the highest annual base.

The Tax Administration will determine the base on which contributions for generational solidarity pension insurance were calculated and paid for the insured person for the relevant year based on all bases. If that base exceeds the highest annual base, the decision will establish the obligation only up to the amount of the annual base, but so that the annual obligation for pension contributions is determined at a rate of 20 percent or 15 percent regardless of the rate at which the pension contribution was paid, i.e., the rate of 20 percent or 15 percent will also apply to the base of income from other income and author fees even though contributions were paid on those incomes during the year at lower rates. The total amounts of contributions paid will be compared with the obligation of contributions calculated at a rate of 20 percent or 15 percent on the prescribed highest annual base and the difference for the refund will be determined. The calculation for 2022 is conducted in kuna, and the difference for the refund is paid in euros.

Tax Is Paid

According to the income tax regulations, the refund of contributions is considered other income and is taxed at an income tax rate of 30 percent, increased by local surtax. The Tax Administration will calculate the income tax and surtax, and the net amount of that income will be paid to the applicant in euros. Other income earned from the refund of contributions is considered final income and cannot be included in the annual income tax calculation, even if it would be beneficial for the insured person as a taxpayer.

The request for a refund of pension contributions for 2022 could be submitted as early as February 1, 2023, and can be submitted within the period before the statute of limitations occurs. According to the General Tax Law, the taxpayer’s right to a refund of overpaid public levies expires after six years, which means that insured persons who missed the opportunity to submit a request for previous years can do so until the expiration of the statute of limitations for the right to a refund.