Investors may enjoy a variety of other tax and non-tax benefits from the Government of Mongolia. Tax benefits may include exemption from the payment of certain taxes, preferential tax treatment, accelerated depreciation and amortisation that is deductible from taxable income, carrying forward of losses and deduction of employee training expenses from taxable income. In addition, equipment imported for construction purposes may be exempt from custom duties and value-added taxes.
The non-tax benefits may include longer land lease rights, residential permits for international investors and their families, expedited registration process if the investment involves a free economic zone or industrial complex and financial guarantees for investment projects involving innovative technology.
Corporate Income Tax
Taxable income falls under the following three categories:
- Income from activities.
- Income from property.
- Income from the sale of property (both immovable and movable, except for shares and securities).
Corporate income tax is subject to a progressive rate scale of 10 per cent (up to 3 billion MNT annual income) and 25 per cent tax applies to an amount in excess of 3 million MNT. (Source: Invest Mongolia Agency, Investment guide to Mongolia 2014)
Personal Income Tax
A permanent resident taxpayer of Mongolia is subject to tax on a worldwide income. An individual who owns a residence or resides in Mongolia for 183 or more days in a tax year shall be considered to be a permanent resident taxpayer.
A non-resident taxpayer of Mongolia, an individual who has no residence in Mongolia and has resided in Mongolia for 183 or less days in tax year, is subject to tax on the income earned in the territory of Mongolia in a tax year.