Overview of the corporate tax system
Taxpayers in Mongolia are separated into two separate classifications − resident and non-resident taxpayers, with different rates applying to various revenue streams depending on whether the entity is a tax resident in Mongolia.
- A resident taxpayer is an entity that resides in Mongolia on a permanent basis and comprises of entities established under Mongolian law and foreign entities that have their headquarters in Mongolia.
- A non-resident taxpayer is an entity that undertakes business activities in Mongolia through a permanent establishment (PE) or foreign entities that earn income sourced in Mongolia.
We outline the applicable tax rates for taxpayers considered Mongolian tax residents below.
The payment date requirements vary depending on the type of income. Local advice should be sought to ensure that you comply with the various payment date requirements.
|Income from Activities||Income From Property|
|Income from activities||Movable and immovable property leases|
|Income from property||Royalty Income|
|Income from sale of property||Dividend income|
|Permanent resident taxpayer||Non-resident taxpayer of Mongolia||Related party /if the following relation is present with a taxpayer, it shall be “a related party/|
|An economic entity formed within the laws of Mongolia||A foreign economic entity that conducts its business activities in Mongolia under its representative office
•Branch (unit and section) •Plant
•Trade and service provider •Oil and natural gas well or a mine that extracts natural resource
|Holds 20 percent or more of the common stock|
|A foreign economic entity that has its headquarter office located in Mongolia||A foreign economic entity that earns income in the territory of Mongolia or from a source in Mongolia in forms other than representative office||Has the right to receive 20 percent or more of the dividends or distributions|
|Has the right to appoint 20 percent or more of the management of the economic entity or is otherwise able to determine its policies|
Taxable income and rates
A taxpayer that resides in Mongolia
|Income From Activities||Income From Property|
||Up to MNT6 billion taxable income- 10% excess of MNT6 Billion – 25% CIT rate is 1% for business entities with annual turnover under MNT300 million and certain qualifying conditions may apply.|
|Income from sale of rights;||10%|
|Income from sale of immovable property;||2%|
A taxpayer that does not reside in Mongolia
|Income from dividend;||20%|
|Loan interest and payment for issuing a guarantee;|
|Income from royalty;|
|Income from interest on finance lease, payment for administrative expense;|
|Income from tangible and intangible asset lease;|
|Income from goods sold, work performed, and service provided in the territory of Mongolia|
|In the case of the representative office of a foreign economic entity transfers its own profit to overseas;|
Time frame for Tax Reporting
Quarterly tax statement shall be reported by the 20th of the first month of the following quarter. Annual tax statement shall be reported by the February 10th of the following year to the corresponding tax authority and make yearend settlement.