MAJOR CHANGES OF MONGOLIAN TAX REFORM

Mar 9 • Economy, Featured, Laws, News • 8256 Views • 2 Comments on MAJOR CHANGES OF MONGOLIAN TAX REFORM

1 Star2 Stars3 Stars4 Stars5 Stars (2 votes, average: 5.00 out of 5)
Loading...

Minister for Finance Khurelbaatar

Mr. Khurelbaatar, Minister for Finance, has launched tax reform campaign to completely reform the current tax system of Mongolia, which has been untouched for years. He claims that this would be the key preparation of the upcoming rigid growth in the Mongolian economy. Khurelbaatar, proved himself as the key person in the Cabinet through his decisive acts such as halting the high interest rate domestic bonds and successful negotiation with IMF officials removing additional tax on personal income above 1.5 million MNT, has ambition to reform many decision-seeking issues in the economic and financial sector of Mongolia such as tax system, social insurance system and customs.

28879330_348675968979282_439751531_o

Find the major changes in the Mongolian tax reform.

  1. Personal income tax law 
  • Introducing simplified tax regime (1% tax on gross turnover for taxpayers with turnover below 50 million tugrugs);
  • Decreasing the non-resident withholding tax from 20% to 15%;
  • Levying tax on capital gains from the transfer of mining license and land rights;
  • Introducing presumptive fixed tax on taxpayers, whose income cannot be determined;
  • Broadening the definition of resident taxpayers;
  • Introducing the controlled foreign company rule;
  • Changing current tax incentive and exemption procedure (refund the amount of tax incentives after taxpayers paid respective taxes);
  • Refunding interest amount paid to a mortgage loan in respect to the portion subject to a difference between commercial mortgage loan rate and Government mortgage program rate;
  • Increasing the tax credit amount on first-time housing from 3 million tugrugs to 6 million tugrugs. The tax credit will be refunded. The incentive shall not be overlapped with 11.

 

  1. Corporate income tax law 
  • Increasing the threshold for upper tax rate from 3 billion tugrugs to 6 billion tugrugs;
  • Introducing simplified tax regime (1% tax on gross turnover for taxpayers with below 50 million tugrugs turnover);
  • Decreasing the non-resident withholding tax from 20% to 15%;
  • Decreasing the non-resident withholding tax on interest income from debt instruments issued by domestic commercial bank from 10% to 5%;
  • Decreasing the non-resident withholding tax on dividends from 20% to 5% (only stocks listed on stock exchanges);
  • Decreasing the tax rate on transfer of rights from 30% to 10%;
  • Levying tax on capital gains from the transfer of mining license and land rights;
  • Levying a fixed tax on non-operating entities to cover administrative costs;
  • Broadening the definition of source income;
  • Improving the permanent establishment related tax rules;
  • Introducing earnings stripping rule;
  • Decreasing the depreciation period for buildings from 40 years to 25 years;
  • Introducing ring-fencing rule on mining license holders.
  • Introducing the controlled foreign company rule;
  • Allowing the foreign tax credit;
  • Increasing the period of loss carry forward to 5 years regardless of business sector;
  • Changing current tax incentive and exemption procedure (refund the amount of tax incentives after taxpayers paid respective taxes);

 

  1. General tax law 
  • Implementing simplified tax regime and segmentation tax policy;
  • Broadening the definition of related party for the purpose of transfer pricing;
  • Strengthening operational framework of Tax administration and information system;
  • Introducing the General Anti-Avoidance Rule;
  • Introducing risk management and risk-based auditing.
  • Improving the procedure of issuing tax guidance on taxpayers’ enquiry;
  • Ensuring compliance of standards and requirements of BEPS and Global Forum on Transparency and Information Exchange for Tax Purposes;
  • Increase the taxpayer penalties;
  • Ensuring confidentiality and security requirements of Common Reporting Standard;
  • Extending the information exchange obligations for third parties for tax purposes;
  • Removing Dispute resolution committee stage on General Department of Taxation (1 stage on aimag, capital city, large taxpayers office;
  • Requiring taxpayers to deposit 10% of payment in order to file a claim to the Dispute resolution committee;
  • No statute of limitation on tax fraud;
  • Setting no tax interest cap;
  • Increasing the deferral of tax arrears from 2 months to 12 months;
  • Increasing the period allowing taxpayers to amend tax returns to 1 year;
  • Strengthening tax authority’s rights on collecting tax independently;
  • Authorizing tax administration rights on tax pre-assessment, pre-collection and pre-seizure of assets;
  • Increasing the claiming right of tax authority for collecting tax debts;
  • Increasing the penalty on tax fraud;
  • Transferring the tax sanctions related provisions from Petty offense Law to General tax law;
  • Introducing tax obligation rule for secondary party if assets are transferred in order to avoid tax obligation;

28822715_348676235645922_298807256_o

Related Posts

2 Responses to MAJOR CHANGES OF MONGOLIAN TAX REFORM

  1. Revive your senses on this Valentine’s Day which is celebrated on 14th February with lots of joy and happiness. Gifts are the trendy items which are sent in various forms like, Combos, Hampers, Tower and are decked with several other items such as, Soft toys, Chocolates, Flowers Bouquets, Paprika Cracker, French Red Wine, Classic Gourmet Jam, Marzipan, Quince Jelly, Winter Almonds, Ritter Sport Chocolates, French Wine Hampers which makes every heart rock, that’s the reason why people Send Valentine’s Day Gifts to Germany.

    http://www.gifts2germany.com/ValentinesDay_germany.asp

  2. Alisha Thapa says:

    Whatever may be the occasion, Floral Gift can be an ideal one for all occasions. As you Send Flower Bouquet to Lucknow with our E-shop, you can be pretty sure that flowers will be liked at the recipient’s end no matter what. Some of the best gifts that can be ideally given with Flowers are Cakes, Chocolates, Sweets, Dry Fruits and so on. You can either choose a whole Bunch of Flower or even a single Red Rose can do the magic for you. Simple idea is to choose such as gift that will bring an instant smile on the face of your loved ones and this is possibly done with online delivery. http://www.FlowerDeliveryLucknow.com

Leave a Reply

Your email address will not be published. Required fields are marked *

« »