HIGHLIGHTS OF MAJOR CHANGES IN NEWLY PASSED TAX LAWS
The plenary meeting of Parliament passed the Package Laws on Tax on March 22 with major votes. The package consists of revised laws on General Taxation, Corporate Income and Personal Income.
The significance of the tax laws is to resolve tax disputes arising between taxpayer and taxation administration, clarify certain ambiguity provisions in tax laws, introduce international standards including BEPS and inventive tax principles into Mongolia in harmony with its condition and broaden the taxation base.
Previous law stipulated an extension period of tax debt payment to be two months. But the new law has set it to be up to two years in consideration of financial problems of the organization.
According to newly approved laws on Corporate Income Tax and Personal Income Tax, entities and individuals who run business in remote province further than 500 km from Ulaanbaatar city will enjoy 50-percent deduction on their income duty. It will be 90 percent reduction, if they operate business in remote province further than 1000 km.
Moreover, producers of wheat, vegetables, potato, fodder plants and berries will enjoy 50 percent tax reduction on their sales income.
Entities with annual sales income of up to MNT50 million have the option to pay tax equal to 1 percent of taxable income and submit tax report once a year and 1 percent tax is also applicable to entities with annual income of up to MNT300 million. Entities with annual taxable income between MNT300 million and MNT1.5 billion shall submit tax report twice a year and pay 10 percent income tax, of which 90 percent will be refunded.
Corporate income tax of 25 percent will be applied to entities with income exceeding MNT6 billion, which was previously MNT3 billion.
Moreover, a 5-percent tax will be imposed on the interest income of an investor, who does not hold exploration and mining licenses of mineral resources and oil and have bought bonds of entities legally established in Mongolia, which are allowed to be openly traded at primary and secondary markets in Mongolia and abroad.
Source: https://montsame.mn