Verified Facts
The tax rates in Mongolia range from 10% to 25% for individuals, with a corporate tax rate of 10% for large enterprises and 6% for small and medium-sized enterprises, and a value-added tax (VAT) rate of 10%.
Tax laws change frequently. Always consult a qualified tax professional for advice specific to your situation. This is a general guide only.
Quick Facts
Tax System Overview
Mongolia has a territorial taxation system, where tax is levied on income earned within the country, regardless of the taxpayer's residence. However, worldwide taxation applies to residents, who are taxed on their worldwide income, with credits available for taxes paid in other countries. To be considered a tax resident in Mongolia, an individual must have a permanent home in the country or stay in the country for more than 183 days in a 12-month period.
The tax system in Mongolia is relatively complex, with a range of taxes and fees applicable to individuals and businesses. The General Taxation Law is the primary legislation governing taxation in Mongolia, and it provides the framework for the country's tax system. The law is administered by the General Department of Taxation, which is responsible for collecting taxes and enforcing tax laws.
Personal Income Tax
| Income Bracket (MNT) | Tax Rate |
|---|---|
| 0 - 360,000 | 10% |
| 360,001 - 720,000 | 15% |
| 720,001 - 1,440,000 | 20% |
| 1,440,001 - 3,600,000 | 22% |
| 3,600,001 and above | 25% |
| Individuals in Mongolia are entitled to various deductions and allowances, including a personal allowance of MNT 240,000 per year. Other deductions include mortgage interest, charitable donations, and education expenses. Tax returns must be filed by April 1 of each year, and taxpayers can file online or through a tax agent. |
Corporate & Business Tax
- The corporate tax rate in Mongolia is 10% for large enterprises and 6% for small and medium-sized enterprises, with a minimum tax of MNT 100,000 per year.
- Small businesses with annual turnover of less than MNT 50 million are exempt from corporate tax.
- Free zones are available for foreign investors, offering tax exemptions and other incentives.
- Businesses must register with the General Department of Taxation within 30 days of commencing operations.
- Foreign investors must obtain a foreign investment license from the Ministry of Foreign Affairs.
VAT / Sales Tax
- The standard VAT rate in Mongolia is 10%, applicable to most goods and services.
- Reduced rates of 5% and 0% apply to certain goods and services, such as basic foodstuffs and medical supplies.
- Exemptions are available for certain goods and services, including education and healthcare services.
- A tourist refund scheme is available for foreign visitors, allowing them to claim a refund of VAT paid on certain goods.
For Expats & Foreign Workers
- Tax residency rules apply to foreign workers who stay in Mongolia for more than 183 days in a 12-month period.
- Mongolia has double taxation treaties with 24 countries, including China, Russia, and the United States.
- Foreign workers are required to register with the General Department of Taxation and obtain a tax identification number.
- Social security contributions are mandatory for foreign workers, with a contribution rate of 10% of salary.
- Foreign workers may be eligible for a remittance allowance of up to MNT 10 million per year.
- Foreign workers must file a tax return by April 1 of each year, declaring their worldwide income.
Crypto & Investment Income
- Investment income, including dividends and interest, is subject to a withholding tax of 10%.
- Capital gains tax is applicable to the sale of shares, real estate, and other assets, with a tax rate of 10% or inclusion in income.
- Cryptocurrency is not specifically regulated in Mongolia, but gains from cryptocurrency transactions may be subject to capital gains tax.
- Dividend income is subject to a withholding tax of 10%, but this may be reduced under a double taxation treaty.