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Mongolia

Taxes

If you want to do business in Mongolia, reading this will help you becoming knowlegeable on the specific tax laws and rates for a LLC which is the most common company structure in Mongolia.

Mongolia imposes a tax on resident entities worldwide income. The prevailing percentage for income earned abroad, from our research, and this is not personal tax advice, is 25%. The country doesn't have known exemptions to transfer in offshore income accrured abroad. Resident companies taxable income up to MNT 3b is taxed at 10%, the excess is taxed at 25%. This ranks Mongolia as 103rd when compared to CIT globally.

The valued added tax rate in MN is 10.00%, which ranks Mongolia as 47th when compared to value added tax rate worldwide. In terms of other taxation, an employer will contribute 13% to the equivalent of a social security fund and an employee will contribute 10%. The average time to comply with a country's labor tax requirements is 48hours. Contributing to this is the number of yearly labor tax payments, which is 12 in MN.

Thin capitalization mandates are officially enacted. Thin capitalisation refers to any type of requirements on a business and the debt-to-asset ratios. Dividends paid by a domestic company to other domestic company is subject to withholding tax at 10% rate. Dividends received may be also included in corporate income tax base. Dividends are payments of a company's earnings, determined by the board, to a class of its shareholders. Dividends can be one of the following cash payments, shares of stock, or other property. Capital Gains are subject to corporate income tax standard rate, except sales of immovable property, subject to tax of 2% on gross sales. A capital gains tax is levied on the profits that a corporation or natural person realizes when he or she sells sells a capital asset for a price that is higher than the purchase price.

The interest withholding tax rate is estimated at 20%. Which means that the tax authorities expects companies to pay tax on 20% of interests remitted abroad. The dividends withholding tax rate is 20%. This should be interpreted that usually the taxman expects relevant legal entities to automatically withhold 20% of payments abroad on dividends. The royalties withholding tax rate is 20%. This means that the taxman expects LLC's to withhold 20% of royalties paid to non-residents. Withholding tax rates may be reduced under a tax treaty.
There is no known tax on wealth in Mongolia. There are no known inheritance and transfer taxes. There is a real property tax. There are certain tax reductions for certain economic activities, foreign investment incentives and free trade zones with certain tax reliefs.

The above is not tax or legal advice for your company circumstances. We are able to point you to a lawyer in Mongolia who can give you the proper advice and help you need. Press incorporate now if you are in a hurry or click the free consultation button above.

Country details

Mongolia
MNT
Ulan Bator
Asia
mn, Russian
3,086,918

Tax treaties

Country Type Date Signed
Korea, Republic of DTC  1992-04-17
Russian Federation DTC  1995-04-05
Poland DTC  1997-04-18
Switzerland DTC  1999-09-20
Austria DTC  2003-07-03
Italy DTC  2003-09-11
United Arab Emirates DTC  2001-02-21
Malaysia DTC  1995-07-27
Canada DTC  2002-05-27
Luxembourg DTC  1998-06-05
Kazakhstan DTC  1998-03-12
United Kingdom DTC  1996-04-23
Turkey DTC  1995-09-12
Czech Republic DTC  1997-01-27
Germany DTC  1994-08-22
India DTC  1994-02-22
Ukraine DTC  2002-07-01
Belgium DTC  1995-09-26
Singapore DTC  2002-10-10
Netherlands DTC  2002-03-08
Indonesia DTC  1996-07-02
China DTC  1991-08-26
Hungary DTC  1994-09-13
France DTC  1996-04-18

Tax treaties Map

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