The Excise Tax Law was adopted by the Mongolia Parliament on June 29, 2006 and became effective from January 1, 2007. The law has been amended several times and has been the subject of a Supreme Court interpretation in 2007.
The law’s purpose is to establish parameters with respect to imposing excise tax on goods, whether imported or locally manufactured, as well as on special purpose apparatuses and equipment utilized for individuals and legal entities engaged in the paid quiz or gambling games.
According to the law, following goods shall be subject to excise tax:
- all kinds of alcoholic drinks;
- all kinds of tobacco;
- gasoline and diesel fuels;
- passenger vehicles.
The excise tax is also imposed on activities of individuals and legal entities engaged in paid quiz or gambling games and on equipment used for such games, such as gaming tables or electronic wheels, automatic games, cashier devices or devices which calculate and display gaming results or keeps track of bids. The excise tax to be imposed on goods, other than spirits distilled in Mongolia, are due before 25th of each month, in advance.
Excise taxpayers are the individuals and legal entities which import and sell the goods as described above, and those which engage in activities of paid quizzes or gambling games. In the event goods subject to the excise taxes are donated or transferred to another party free of charge, as well as when used internally by an individuals and or legal entity, an excise tax shall be imposed.
An excise tax equal to MNT 36,250,000 (approximately US$ 14,800) per month, is imposed on the activities of individuals and legal entities which operate paid quizzes or gambling games via cyber, internet or mobile networks.
The some goods are exempted from excise tax under the law, such as goods produced within the territory of Mongolia solely for export; Mongolian traditional home-made liquor distilled from milk for household use; snuff tobacco; legally obtained and imported duty free alcohol and tobacco; dual-fuel cars; cars running on liquefied gas; and electric cars.
The recent amendments to the state budget include provisions to increase excise taxes on gasoline and diesel fuel. The excise tax on passenger cars will be increased based on the vehicle’s engine capacity. The excise tax on alcohol, excise tax on cigarettes, and customs tax on cigarettes will also increase. If the amendment is approved by the Parliament, these proposed excise tax increases to take effect on April 1, 2017.