As you all aware that the Parliament of Mongolia ratified the amendments to laws on taxation and related legislation during the irregular session held on 22 March 2019 in order to the submission of Government’s tax reform packages.
The new tax laws require the Cabinet, Ministry of Finance and Mongolian Tax Authority to release a number of implementing guidelines. As these regulations largely play an important role to set the tone of the taxing rules, we encourage you to monitor these developments in a timely manner.
The newly adopted tax laws, including the General Tax Law, the Corporate Income Tax, Value Added Tax and Personal Income Tax Laws and tax implementation guidelines and regulations came into force on 1 January 2020.
A number of important changes that may have a material impact on taxpayers, requires taking appropriate actions to comply with the new requirements. There are following main revisions introduced to the tax reform: new amendments include increased supervision on suspicious tax activities, tax deductions for environmentally friendly product purchases and rehabilitation expenses by companies.
Furthermore, the higher tax refunds—up to 6 million MNT-for new apartment owners if the deed is issued in 2020. Independent contractors such as artists will pay taxes from their net income, not from their income as before. Shareholders’ dividends will be taxed at 5 percent, and individuals and organizations who make less than 50 million MNT in sales income, will be taxed 1 percent of their total sales income, and small traders will be charged 1 to 50 percent of the minimum wage, depending on their sales volume.