Mongolia

There have been multiple additions and amendments to the tax legislation promulgated by Mongolian Parliament as follows:

Corporate Income Tax (CIT) Law

To stimulate economic activity, a series of tax incentives were introduced in 2023. These incentives were specifically designed to encourage businesses to:

• Relocate operations beyond city boundaries
• Enhance employment opportunities
• Advocate for the use of public transportation
• Strengthen the financial market
• Invest in projects related to heating and electric power production
• Support start-up companies specializing in innovative products, works, and services
• Foster investment in software development.

Commencing on 1 July 2024, a series of modifications will be enacted for the securities issued by the Government, provinces, capital city, and resident taxpayers that are traded on the primary and secondary domestic stock markets. These changes include:

• The taxable income earned by non-resident taxpayers from the sale of these securities will be computed on a net basis, marking a departure from the current practice where the tax base is the gross amount.
• Obligations of the tax withholder are assigned to the entities responsible for the central depository and custodian activities of these securities, marking a departure from the current practice of the self-assessment basis.
• A significant tax credit will be provided for the capital gain taxes on these securities. Specifically, a tax credit of 90 percent will be applied for the years 2024-2026, and a 50 percent tax credit will be applied for the years 2027-2029.

See the Tax credits and incentives section for details.

Real estate income tax

• The immovable property tax (IPT) rate has been increased from 0.6% through 1.0% to 0.6% through 2.0%.
• Amendments and additions to tax exemptions have been introduced.

See the Other taxes section for details.

Revision of the Asset Valuation Act

The revision of the Law on Asset Valuation was approved by the Parliament on 17 June 2022, and it is effective from 1 January 2023. This revised legislation incorporates the principle of asset valuation for taxation purposes. In alignment with this objective, the Ministry of Finance is poised to promulgate the procedural guidelines and standard methodology for the valuation of assets for tax considerations.

Law on Minerals

On April 19, 2024, a new law pertaining to the National Treasury Fund was introduced. This law brought about amendments to several existing laws, including the Law on Minerals and the Corporate Income Tax (CIT) Law.

The recent amendments to the Mineral Law now prohibit any entity, whether acting independently or in conjunction with affiliated parties, from owning more than 34 percent of the total issued shares in a legal entity that holds a license for a strategically important deposit. The only exceptions to this rule are legal entities that have signed an Investment Agreement with the Government of Mongolia or state-owned entities.

Furthermore, the amendments to the CIT Law impose a tax rate of 30 percent if the beneficial owner of a mining license for a strategically important mineral deposit transfers, either fully or partially, the right to own and use land, as well as exploration and exploitation licenses for minerals, radioactive minerals, and oil. Such transfers may occur through the gifting or bequeathing of shares, participation, or voting rights in a legal entity.