Legal Document
LAW OF MONGOLIA
09 July, 2015 Ulaanbaatar
LAW ON VALUE ADDED TAX
/Revised version/
Article 1.Purpose of the law
1.1.The purpose of this law is to regulate relations related to imposing value-added tax, refund and reporting of it and rate of the tax.
Article 5.Taxpayer and tax withholder
5.1.A taxpayer shall be an individual who does not sell goods, works or services in any form, but purchases and imports goods for personal use, not for business activities.
/ This part was amended according to the law dated March 22, 2019 /
5.2.The following persons who are obliged to deduct taxes and deduct from operating sales revenue up to MNT 50 million or more shall be tax withheld:
5.2.1.Sales of goods, works and services in the territory of Mongolia;
5.2.2.Goods, works and services are imported;
5.2.3.Goods, works and services have been exported.
5.3.If the amount of sales revenue of goods, works and services sold by a representative office of a foreign business entity specified in the Law on Corporate Income Tax has reached 50 million togrogs or more, it shall be covered by Article 5.2 of this law.
5.4.No tax shall be imposed on salaries, wages, allowances, pensions, allowances, bonuses and incentives paid to a citizen working permanently or temporarily under an employment agreement.
5.5.The amount of sales revenue specified in Articles 4.1.8 and 5.2 of this Law in the amount of 50 million MNT or more shall not include the sale of fixed assets registered with the assets of the person.
/ This part was amended according to the law dated March 22, 2019 /
5.6.The amount of sales revenue specified in 5.2 of this Law shall be confirmed by primary accounting documents.
Article 7. Taxable goods, works and services
7.1.Unless otherwise provided by law, the following goods, works and services shall be taxed:
7.1.1.All types of goods, works and services sold in the territory of Mongolia;
7.1.2.All types of goods, works and services imported to Mongolia from abroad;
7.1.3.All types of goods, works and services exported from Mongolia.
Article 8.Imposition of tax
8.1.Tax shall be imposed in accordance with the following procedures:
8.1.1.When goods, works and services are imported, exported or sold;
Article 9.Tax valuation
9.1.The taxable assessment shall be determined as follows:
9.1.1.The value of tax assessed on imported goods shall be added to the Customs value determined in accordance with the Customs Tariff and Customs Tax in accordance with the Customs Customs, excise and other taxes;
Article 10.Term of imposition of tax
10.5. If the goods are imported, the time for imposition of tax shall be set on the day the goods are declared to the Customs.
Article 11.Tax rate
11.1.10 percent shall be imposed on the sales value of goods, works and services specified in 7.1.1 and 7.1.2 of this Law.
11.2.The tax rate to be imposed on goods, works and services specified in 7.1.3 of this Law shall be equal to zero ("0").
11.3.The tax on imported gasoline or diesel fuel shall be levied at 0-10 percent.
11.4.The Government shall set the tax rate for imported gasoline and diesel fuel within the limits specified in Article 11.3 of this Law, taking into account the specifics of the sector.
Article 12. Application of zero tax rate / "0" /
12.1. The following goods, works and services exported shall be taxed at the rate specified in Article 11.2 of this Law:
12.1.1. Goods exported from the territory of Mongolia and declared to the Customs;
12.1.2. International passenger and cargo transportation services provided by Mongolia to a foreign country, from a foreign country to Mongolia, as well as from a foreign country to other countries through the Mongolian border in accordance with an international treaty to which Mongolia is a party;
12.1.3. Services provided outside the territory of Mongolia (including tax exempt services);
12.1.4. Services provided to non-residents of Mongolia (including tax-exempt services);
12.1.5. Air traffic control, technical and fuel services, cleaning, flight crew and trade, food and beverage services provided to domestic and foreign aircraft operating international flights;
12.1.6. State medals, banknotes and coins produced domestically by the order of the Government and the Bank of Mongolia;
12.1.7. The final product of mineral resources.
12.2. Article 12.1.4 of this law shall not apply to services provided in direct connection with movable and immovable property located in the territory of Mongolia.
12.3. Paragraph 12.1 of this law shall apply to withholding taxpayers engaged in export activities on the basis of an agreement concluded with a non-resident person in Mongolia.
/ This part was amended according to the law dated March 22, 2019 /
12.4. Article 12.1.2 of this law shall not apply to separate transportation within the borders of Mongolia in connection with international passenger and cargo transportation services.
12.5The Government shall determine the type, classification and code of the final mineral product exported specified in 12.1.7 of this Law .
Article 13.Tax exemption
13.1. The following goods shall be exempt from tax:
13.1.1. Goods for personal use approved by the Customs and in the amount allowed for tax-free entry for passengers;
13.1.2. Goods imported for the needs of foreign diplomatic missions and consulates permanently residing in the territory of Mongolia, the United Nations and its specialized branches;
13.1.3. Goods received from foreign governments and international organizations on grants, humanitarian aid and soft loans;
13.1.4. Special purpose tools, equipment and vehicles for use by citizens with disabilities;
13.1.5. Weapons and special equipment imported for the needs of the armed forces, police, state security, enforcement of court decisions, state special protection organizations and the Anti-Corruption Agency;
/ This clause was amended according to the law dated March 22, 2019 /
/ This clause was amended according to the law dated May 14, 2020 /
13.1.6 air passenger ships and their spare parts;
13.1.7. Income from the sale of an apartment or part thereof used for housing purposes;
13.1.8. Blood, blood products and organs to be used for medical purposes;
13.1.9. Gas fuel, its containers, equipment, special purpose machinery, machinery and equipment;
13.1.10. The national currency of Mongolia ordered abroad;
13.1.11. Gold sold;
13.1.12. Experimental products of scientific research;
13.1.13. Mineral products exported other than those specified in 12.1.7 of this law ;
13.1.14. Any claim arising from a loan or financial lease agreement transferred from a bank, non-bank financial institution or other legal entity to a bank, special purpose company or housing finance company for the purpose of issuing asset-backed securities;
13.1.15. Cereals, potatoes, vegetables, seedlings, fruits and flour produced by a farmer;
13.1.16. Lean and processed meat, unprocessed internal organs and by-products sold domestically in the territory of Mongolia;
13.1.17. Food milk and dairy products processed domestically and sold domestically in the territory of Mongolia;
13.1.18. Equipment and spare parts for the production of small and medium enterprises manufactured and sold in the territory of Mongolia;
13.1.19. Raw materials, materials and reagents not required to produce new goods and products in the domestic and foreign markets by the innovation project;
13.1.20. Imported round timber, logs, sawn timber, planks, logs, semi-finished timber;
13.1.21. Raw and washed and combed cashmere and leather exported;
13.1.22. Materials, techniques, equipment, substances and tools to be used for research, analysis and restoration of cultural heritage;
13.1.23. Goods, works and services purchased by Mongolia for the official use of diplomatic missions and consulates abroad and for the personal use of their employees shall be exempted from taxation in that country, while those purchased by diplomatic missions and consular posts in Mongolia. goods purchased, work performed and services provided in the territory of Mongolia for personal use;
13.1.24. An international postal item addressed to an individual with no more than two identical goods worth 10 times the minimum monthly wage and 30 times the minimum monthly wage for a laptop;
13.1.25. The contractor and subcontractor shall import special purpose machinery, equipment, equipment, raw materials, materials, chemicals and explosives for the period of exploration and for the first five years of operation for activities related to oil and non-conventional oil. , spare parts;
13.1.26. Report materials, samples and petroleum related to petroleum and non-traditional petroleum;
13.1.27. Goods worth up to three million togrogs purchased by a passenger in a free zone.
13.1.28. Renewable energy research and production equipment, its accessories and spare parts.
/ This provision was added by the law in December 18, 2015 /
13.2. The Government shall approve the list of goods related to Articles 13.1.9, 13.1.12, 13.1.18, 13.1.19, 13.1.20, 13.1.22 and 13.1.28 of this Law.
/ This provision was amended according to the law dated December 18, 2015 /
/ This part was amended according to the law dated March 22, 2019 /
13.3. Article 13.1.4 of this law shall not apply to the purchase of a non-special purpose vehicle.
13.4. Article 13.1.7 of this law shall not apply to a newly built apartment building for sale.
13.5. The following services shall be exempt from tax:
13.5.1. Currency exchange services;
13.5.2. Banking services related to receiving, transferring money, issuing guarantees, payment invoices, promissory notes and savings accounts;
13.5.3. Insurance, insurance brokerage, reinsurance and property registration services;
13.5.4.Services for issuing, transferring, selling , receiving and issuing guarantees for securities and shares ;
13.5.4The activities of registering, issuing, trading, transferring, selling, receiving and storing financial instruments specified in Article 4.1.6 of the Securities Market Law in the primary, secondary and over-the-counter markets and issuing guarantees for them;
/ This provision was amended according to the law dated March 22, 2019 /
13.5.5. Lending services;
13.5.6. Services for issuing and transferring interest on placement of funds of social and health insurance funds;
13.5.7. Loan interest rates of banking and non-bank financial institutions, savings and credit cooperatives, interest rates specified in Article 9.4 of the Corporate Income Tax Law, shares, securities, other financial instruments and financial lease interest rates specified in Article 10.1.3. services to pay dividends, loan guarantee fees and insurance contract fees;
/ This clause was amended according to the law dated March 22, 2019 /
13.5.8. Services for renting an apartment built for residential purposes and a certain part of it;
13.5.9.Educational and vocational training services specified in the charter of an individual or legal entity licensed to conduct educational and vocational training;
13.5.10. Health services;
13.5.11. Services of religious organizations;
13.5.12. Services provided by government organizations. This includes public services provided by the government, its agencies and budgetary entities;
13.5.13. Public transportation services specified in 3.1.11 of the Law on Road Transport [6];
13.5.14. Services provided to foreign tourists (tour operator) by a legal entity engaged in tourism activities by concluding an agreement with a foreign tourism organization to receive tourists, plan and advertise the service, and compile documents;
13.5.15. Cultural heritage restoration services;
13.5.16. Funeral services.
13.5.17. Sources of income allocated from the state budget to the Future Heritage Fund and investment income of the fund.
/ This provision was added by the law in 5 February 2016 /
13.5.18. Veterinary services.
/ This provision was added by the law in December 08, 2017 /
13.5.19. Notary services.
/ This provision was added by the law in 5 May 2019 /
13.6. A person who sells goods, works and services worth less than 50 million togrogs per year (except for import) shall be exempt from tax.
13.7. Article 13.5.10 of this law shall not apply to the production and sale of drugs, medicines, medical devices and equipment.
13.8. The services specified in 13.5.14 of this law shall not include tourist bases, restaurants, tourist transportation, guiding and hotel services.
13.9. If goods, works and services are transferred to others free of charge or used for personal use in forms other than those used for internal production turnover, they shall not be exempt from value-added tax.
13.10. Paragraph 13.1 of this Law shall not apply to a person selling goods specified in 13.1.15, 13.1.16 and 13.1.17 of this Law.
13.11. Goods and works purchased from the domestic market with financial / monetary funds provided by foreign governments and international organizations within the framework of humanitarian and grant aid, grant and humanitarian aid and soft loans received from foreign governments and international organizations The member of the Government in charge of finance and budget shall approve the procedure for tax exemption for services.
13.12. Services that non-governmental organizations receive funding from the Government on the basis of decisions and agreements and perform certain functions of the state executive body in full or in part shall not apply to 13.5.12.
13.13. The principle of refunding the tax paid to foreign diplomatic missions and consulates and their employees shall be followed in exercising the tax exemption specified in 13.1.23 of this law.
13.14. Goods, works and services financed by the Government of Mongolia in accordance with international agreements concluded and ratified by foreign governments and international organizations;
13.15. The Government shall approve the name of the project or activity specified in 13.14 of this Law, the person implementing it, the amount of project financing and the project implementation period.
Article 14.Deduction of taxes
14.1.The following taxes paid in accordance with Articles 7, 8 and 11 of this Law shall be deducted from the tax payable to an individual or legal entity in the period after registration as a withholder:
14.1.2.Paid for goods imported for sale, as well as for production and service purposes;
14.1.5.Taxes paid on goods, works and services imported or purchased for the preparation of fixed assets and taxes paid on the purchase and import of fixed assets shall be deducted in proportion to the following periods:
14.1.5.a. buildings and structures for 10 years;
14.1.5.b. equipment for 5 years; / This includes exploration costs./
14.1.5.c. Directly from fixed assets other than those specified in 14.1.5.a and 14.1.5.b of this law.
/ This provision was amended according to the law dated March 22, 2019 /
14.2.No deduction shall be made from the tax payable if the primary raw materials specified in 14.1.4 of this Law are imported or purchased and re-sold.
14.6.Tax paid on import and purchase of the following goods, works and services shall not be deducted from the total amount of tax payable by the taxpayer:
14.6.1.Passenger cars, their parts and spare parts;
14.6.2.Goods, works and services purchased for personal and employee needs;
14.6.3.. Goods, works and services imported or purchased for the production and services specified in Article 13 of this Law;
14.6.4.Goods, works and services imported and purchased that are not related to taxable goods, works and services for the reporting period;
14.6.5.Goods, works and services imported and purchased for pre-operational activities.
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