Mongolia resident economic entities are taxable on aggregate annual income earned worldwide. Non-resident economic entities carrying out business activities in Mongolia are taxable on the income earned within the territory of Mongolia and otherwise from Mongolian sources.
According to the Law on Corporate Income Tax enacted in 2006, taxable corporate income includes income from activities, properties and sale of property.
The general tax rate for an economic entity incorporated in Mongolia is ten percent (10%) for the first 0-3.0 billion MNT and 300 million MNT, plus twenty-five percent (25%) for all income exceeding 3.0 billion MNT.
Dividend income, royalty income and interest income are taxed at ten percent (10%), income from the sale of a right at thirty percent (30%) and income from the sale of immovable property at two percent (2%).
A representative office of a foreign economic entity that transfers its own profit overseas is taxed at twenty percent (20%). Similarly, the following income of a taxpayer who does not reside in Mongolia but generates income in Mongolia shall be taxed at twenty percent (20%):
- dividend income received from an economic entity that is registered and operates in Mongolia;
- loan interest and payment for issuing a guarantee;
- royalty income and interest on a finance lease, payment for administrative expenses, rent, management expenses and lease, and income from the lease of tangible and intangible assets; and
- income from goods sold, work performed and services provided in the territory of Mongolia.
Payment of corporate income tax is on a quarterly basis with the payment for the first three quarters to be paid between the 1st and the 20th of the first month for the following quarter, and for the fourth quarter between January 1st and February 10th of the following year.
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