Mongolia Certified Tax Consultant flashcards
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32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Tax legislation hierarchy
- The order of legal authority: Constitution, General Tax Law, specific tax laws, State Great Khural resolutions, and ministerial orders. Lower levels cannot conflict with higher levels.
- Taxpayer registration deadline
- Taxpayers must register with the tax authority within 10 days of establishment or change of address. A Taxpayer Identification Number (TIN) is issued.
- Statute of limitations
- The tax authority may assess additional tax within 5 years from the end of the tax period. For tax evasion, the period is 10 years.
- CIT rate structure
- Corporate income tax is 10% on taxable income up to MNT 6 billion and 25% on the entire taxable income if it exceeds MNT 6 billion.
- CIT advance payments
- Quarterly advance payments are due by the 20th day of the month following each quarter. The annual return is due by February 10.
- Tax depreciation rates
- Straight-line rates: buildings 2.5%, machinery 10%, vehicles 15%, computers 25%, intangible assets 20%. Applied to tax basis.
- Thin capitalization rule
- A 3:1 debt-to-equity ratio applies to non-bank taxpayers. Interest on excess debt is non-deductible for CIT purposes.
- PIT rate structure
- Personal income tax is 10% on annual income up to MNT 120 million and 15% on the excess above MNT 120 million.
- PIT tax credits
- Credits up to MNT 1 million each for education, medical expenses, and mortgage interest. Credits reduce taxable income.
- Non-resident PIT withholding
- A 20% withholding tax applies to Mongolian-source income paid to non-residents, such as dividends, interest, and royalties, unless a treaty reduces the rate.
- VAT registration threshold
- Mandatory VAT registration when taxable turnover exceeds MNT 50 million in any 12-month period. Voluntary registration is allowed below threshold.
- VAT input credit
- VAT paid on purchases used for taxable supplies is creditable. VAT on exempt supplies or non-business use is not creditable.
- Reverse charge VAT
- Mongolian businesses must self-assess and remit VAT on services received from non-residents. The recipient acts as withholding agent.
- VAT place of supply services
- For B2B services, place of supply is where the supplier is established. For B2C services, it is where the customer is located.
- Excise tax due date
- Excise tax on domestic production is due by the 10th day of the month following the tax period. On imports, it is collected by Customs at importation.
- Customs value methods
- Primary method is transaction value. Fallback methods: identical goods, similar goods, deductive value, computed value, and flexible approach.
- Mineral royalty rates
- Royalty is 5% of sales value for most minerals, 2.5% for coal, and 10% for precious stones. Base is gross sales value less transport and refining.
- Subsoil use payment
- A one-time payment for exploration and mining licenses, set by the government based on area and type. Distinct from annual land payments.
- Real estate tax rate
- A 0.6% tax on the value of immovable property (buildings, structures) for individuals and legal entities. Primary residence up to 100 sqm is exempt.
- Vehicle tax
- An annual local tax based on engine size and vehicle age. Rates range from MNT 10,000 to MNT 500,000 per vehicle.
- Social insurance rates
- Employer contributes 12.5% and employee 10% of gross salary. Base is capped at 10 times the minimum wage.
- Payroll withholding deadline
- Employers must remit withheld PIT and social insurance contributions by the 10th day of the month following the payment month.
- E-filing mandate
- Most taxpayers must file returns electronically via the tax authority's e-tax portal. A digital signature from the National Data Center is required.
- Record retention period
- Taxpayers must keep accounting records and tax documents for 5 years. This applies to invoices, contracts, and bank statements.
- Late filing penalty
- A penalty of MNT 100,000 applies for each late tax return. Repeated offenses may lead to higher penalties.
- Tax audit types
- Desk audit (document review), field audit (on-site), and special audit (targeted). Taxpayer must be notified in advance except for unannounced audits.
- Tax dispute appeal timeline
- Taxpayer may appeal to the tax authority within 30 days. If unsatisfied, may file with the Administrative Court within 15 days of the review decision.
- Underreporting penalty
- A penalty of 20% of the underpaid tax applies for underreporting. Tax evasion may result in 50-100% penalty and criminal liability.
- Permanent establishment threshold
- A PE includes a fixed place of business, a construction site lasting over 6 months, a dependent agent, or service PE if over 183 days.
- Transfer pricing arm's length
- Related-party transactions must be priced as if between independent parties. Documentation is required, and penalties apply for non-compliance.
- Tax residency individual
- An individual is a Mongolian tax resident if present in Mongolia for more than 183 days in a calendar year. Residents are taxed on worldwide income.
- Foreign tax credit
- Mongolian residents can credit foreign taxes paid on foreign-source income, limited to the Mongolian tax payable on that income.