Хэвлэх DOC Татаж авах

LAW ON PERSONAL INCOME TAX /REVISED VERSION/

March 22, 2019 Ulaanbaatar city

CHAPTER ONE

General Provisions

Article 1.Purpose of the law

1.1.The purpose of this law is to regulate relations concerning imposition of personal income tax and payment and reporting thereof to the budget.

Article 2.Legislation on personal income tax

2.1.The legislation on personal income tax (hereinafter referred to as "tax") comprises of General Taxation law, the Constitution of Mongolia, this law and other legislative acts enacted in conformity with the these laws.

Article 3.Scope of the law

3.1.The relations regarding the imposition of tax on personal income, specified in the Article 5, will be regulated by this law.

Article 4.Legal terms

4.1.The following definitions stipulated in this Law shall be understood as follows:

4.1.1.“Business entity” is as defined in Article 4.1.1 of the Corporate Income Tax Law;

4.1.2.“Intangible assets” is as defined in Article 4.1.2 of the Corporate Income Tax Law;

4.1.3.“Owner of a micro-enterprise” is referred to an individual engaged in trade, services, passenger and freight transportation services with no particular location of workplace, booths, etc;

4.1.4.“Income earned abroad” is an income other than those specified in the Articles 4.1.7 and 4.1.8 of this law;

4.1.5.“Herder household is a family with main income generated from permanent livestock herding;

/This sub section was annulled by the law of Novermber 13, 2020/

4.1.6.“Individual with livestock” refers to an individual who owns livestock in forms other than those specified in Article 4.1.5 of this law;

/This sub section was annulled by the law of November 13, 2020/

4.1.7.“Income earned in Mongolia” is referred to a taxpayer’s income earned in Mongolia as stated in Article 6.3 of this law;

4.1.8.“Income derived from Mongolia” refers to an income earned by a non-resident taxpayer conducting a work or service for a resident taxpayer and an income specified in Article 4.1.7 of the Corporate Income Tax Law;

4.1.9.“Immovable property” is as defined in Article 4.1.9 of the Corporate Income Tax Law;

4.1.10.“Irregular activities” includes works and services that do not constitute a fixed/regular source of income, and that are irrelevant to the individual's legal or any contractual obligations;

4.1.11.“Withholder” refers to Article 6.1.19 of the General Taxation law of Mongolia.

Article 5.Taxpayer

5.1.A citizen of Mongolia, foreign national and stateless person who earned a taxable income in the tax year or obliged to pay tax under this law shall be a taxpayer.

5.2.Taxpayer shall be classified as a permanent resident of Mongolia and non- resident of Mongolia.

5.3.A resident taxpayer of Mongolia refers to an individual who meets any of the following conditions:

5.3.1.An individual residing in Mongolia for 183 days or longer during 12 consecutive months;

5.3.2.If fifty or above percent of the total taxable income is earned in or derived from Mongolia.

5.4.A sequential order stated in Articles 5.3.1 and 5.3.2 shall be adhered in defining permanent resident of Mongolia, stated in Article 5.3 of this law.

5.5.A non-resident taxpayer refers to individuals other than those specified in Articles 5.3 and 5.6, who earned income in or derived income from Mongolia.

5.6.A civil servant of Mongolia with an appointment to work abroad will account as a permanent resident taxpayer.

5.7.A period, specified in Articles 5.3.1 of this Law, shall be counted by calendar days from the day entered the Mongolian border. In case of multiple entries and exits, the taxpayer’s cumulative number of days stayed in Mongolia shall be determined.

5.8.Cumulative number of days, stated in Article 5.7 of this law, shall cover the given tax year and its preceding tax year.

5.9.A foreigner appointed in foreign diplomatic mission and consulate in Mongolia, or in the United Nations and its specialized agencies, and his/her family member shall not be referred as a permanent resident taxpayer of Mongolia.

5.10.If employment in Mongolia for 183 days or longer period during 12 consecutive months is proven by employment contract and permission by a competent authority, the taxpayer can be registered as a permanent resident taxpayer of Mongolia.

5.11.Head of state administrative body in charge of tax matters shall approve procedures regarding defining and registering as or removing from register, or tax payment by permanent resident taxpayer of Mongolia and non-resident taxpayer of Mongolia, stated in this article.

CHAPTER TWO TAXABLE INCOME

Article 6.Taxable income

6.1.A permanent resident taxpayer’s income derived from Mongolia or earned abroad in the given tax year shall be subject to taxation.

6.2.AN income earned in or derived from Mongolia in the given tax year by a non-resident taxpayer, specified in Article 5 of this law, shall be subject to taxation.

6.3.The taxpayer’s following income shall be subject to taxation, including:

6.3.1.Salary, wages, bonus, incentive and other similar income from employment;

6.3.2.operational income;

6.3.3.property income;

6.3.4.income from sale or transfer of property;

6.3.5.indirect income;

6.3.6.other income.

Article 7.Salary, wage, bonus, incentive and other similar income from employment

7.1.Taxpayer’s salary, wage, bonus, incentive and other similar income from employment shall include the following income:

7.1.1.Base salary, additional wage, bonus, vacation pay, pension, benefit/allowance and other similar income earned in accordance with employment contract established with an employer;

7.1.2.Allowance to the employee or employee’s family member and other similar income paid by an employer;

7.1.3.Gift from an employer to an employee and his/her family member;

7.1.4.Salary, wage, bonus, incentive and other similar income earned as a member of board of directors, supervisory council, part-time and other forms of council, committee, or working group;

7.1.5.All types of bonuses and incentives by foreign and domestic entities, organizations, individuals and other bodies;

7.1.6.Wages, bonuses, additional wages, allowances and other similar income earned work or services under contract established with a legal body or an individual, other than the primary employer;

7.1.7.Lunch and transportation allowance.

Article 8.Operational Income

8.1.Operational income shall include the following income generated from operations conducted without establishing a legal entity, including:

8.1.1.Income generated from independent professional work or service;

8.1.2.Income generated from self-employed production or sale of products, performance of work or service, or intermediation services;

8.1.3.Income from scientific, literal and artistic work produced, for invention or innovation created, and organization of or participation in sport and art performances, and other similar income;

8.1.4.Goods, work and services earned free of charge in connection with operations engaged in.

8.2.Income earned for irregular activities are accounted as operational income.

Article 9.Property income

9.1.The following income shall be subject to property income:

9.1.1.Income from lease or use of a property;

9.1.2.Income from copyright fees/charges;

9.1.3.income from dividend;

9.1.4.income from interest.

9.2.Income from copyright charges refers to those specified in Article 9.2 of the Corporate Income Tax Law.

9.3.Income from dividends refers to these specified in Article 9.3 of the Corporate Income Tax Law.

9.4.Interest income refers to those specified in Article 9.4 of the Corporate Income Tax Law.

Article 10.Income from property sale or transfer

10.1.Income from property sale or transfer shall include the following income:

10.1.1.Income from sale of immovable property;

10.1.2.Income from sale or transfer of land possession and use rights or other intangible assets;

10.1.3.Income from sale of movable properties;

10.1.4.Income from sale of stocks, securities and other financial facilities.

10.2.Income from sale or transfer of intangible asset includes income generated by a taxpayer from transferring own intangible asset to others under the law.

Article 11.Indirect income

11.1.The following income of goods, work and services, with no direct connection with the employee’s duty performance but provided by the employer in addition to salary, wage, bonus and incentives, shall be subject to indirect income, in particular:

11.1.1.Transportation service at the discount or free of charge;

11.1.2.Payment of apartment rent, apartment bill and fuel cost;

11.1.3.Entertainment allowance;

11.1.4.Payment of services by housekeeper, driver and gardener and other services;

11.1.5.Repayment of due debts to the employer or other bodies;

11.1.6.Difference of interest rate of loan granted below commercial loan interest rate;

11.1.7.Voluntary insurance premiums, other than those specified in Article 11.2.7 of this law, paid by the employer;

11.1.8.Family members’ tuition;

11.1.9.Payment of costs related to moving to or from Mongolia;

11.1.10.Allowance for working and living in harsh weather conditions;

11.1.11.Other similar income to those specified in Articles 11.1.1-11.1.10 of this law.

11.2.The following indirect income, provided to an employee by an employer with the purpose to improve working condition, will not be subject to a taxable income, in particular:

11.2.1.food served to all employees, at the same conditions, at cafeteria, canteen and mess hall;

11.2.2.rest areas and other services provided, as well as transportation service to and from the workplace, applicable to all;

11.2.3.difference of interest rate of loan granted to an employee, below commercial interest rate, for purchase or construction of an apartment/housing;

11.2.4.assistance or support for medical expenses paid to health organizations;

11.2.5.per diem by an employer;

11.2.6.The cost of safety clothes or uniforms, neutralizer drinks and other similar supplies provided by an employer in accordance with the law;

11.2.7.Life, health, accident and professional liability voluntary insurance premiums paid by an employer, in relation to employment.

11.3.Indirect income, specified in Article 11.1 of this law, shall be determined by the amount of expenses incurred by the employer in providing such income.

Article 12.Other income

12.1.The following incomes shall be subject to the income described in Article 6.3.6 of this law, including:

12.1.1.Art or sport competition award, winning prize of festivals and other similar income;

12.1.2.Income received as a winner of quiz, gambling and/or cash or prize lottery;

12.1.3.Income from micro sales, work or service.

Article 13.Determining Taxable Income

13.1.Tax exempt income shall be deducted from taxable income for determination the amount of taxable income.

CHAPTER THREE 

DETERMINING TAXABLE INCOME

Article 14.Determining taxable income from salary, wage, bonus, incentive and similar income determined in the following manner

14.1.Medical and social insurance contribution shall be deducted from income of salary, wage, bonus, incentive and other similar income, specified in Article 7 of this Law, to determine taxable income.

Article 15.Determining gross taxable income from operational income

15.1.Taxable income/amount of operational income shall be determined by deducting the costs that meet requirements specified in Article 13.1, the Corporate Income Tax Law, based on principles set forth in Article 13.2 and shall apply Articles 14, 15, 16 and 17 of the same law.

15.2.If deductible expenses set forth in Article 15.1 of this law have been spent on personal use of a taxpayer, it shall not be deducted from taxable income.

15.3.If goods produced, work performed and services delivered are disbursed for his or her own family needs, the applicable operational costs shall not be deemed as deductible costs from gross taxable income.

15.4.If a taxpayer uses machinery, equipment, and facility for both, operation and family need, the cost shall be calculated at pro-rata basis and considered as deductible cost from taxable income.

15.5.Wages paid to taxpayer’s family member shall be calculated at pro-rata basis against the amount paid as social insurance premium and considered as deductible cost.

15.6.If an individual, with taxable income of up to 50 million MNT in the preceding year, as proved by financial statement, applies for and the line tax authority records the request, taxable income can be determined by total operational income.

15.7.A taxpayer, who satisfied terms and conditions, stated in the Law on Value Added Tax and is registered as a value added tax withholder, and is entitled to discounts and exemptions pursuant to this law, shall not make request/application under Article 15.6 of this law.

15.8.The head of a state administrative organization in charge of taxation shall approve a procedure on registering, processing and excluding requests/applications specified in Article 15.6 of this Law.

Article 16.Determining taxable income from property income

16.1.Taxable income from property income shall be determined in the following manner:

16.1.1.By difference of deducting expenses, proven by receipts/bills, related to the property use or lease, from the total income of the property use or lease;

16.1.2.Total income of rights fee;

16.1.3.Total income from dividend;

16.1.4.Total interest income.

16.2.In case a business entity, to which a taxpayer holds shares, is liquidated, taxable income shall be pro-rata income attributable to the shares and share of capital less initial cost of shares and the capital and costs incurred to become a shareholder.

Article 17.Determining taxable income from property sales or transfer

17.1.Taxable income from property sales or transfer shall be determined in the following manner:

17.1.1.Total income from sale of immovable properties as specified in Article 10.1.1. of this law;

17.1.2.Income from sale or transfer of a property, specified in Articles 10.1.2 and 10.1.3 of this law, less the below costs with proven receipts/bills:

17.1.2.a. Documented payment made to government organizations regarding obtaining permission; and

17.1.2.b. Documented cost of or related to property sale or transfer.

17.1.3.income generated from sale of shares, securities and other financial instruments, specified in Article 10.1.4 of this Law, less the purchase price of and documented costs of purchase of the shares, securities and other financial instruments;

17.1.4.Where a co-owned share or security is sold, expense applicable to the taxpayer shall be calculated once the amount, deducted under Article 17.1.3 of this Law, is determined.

17.2.The procedure, set forth in Article 30.6 of the Corporate Income Tax Law, shall be applied in calculating fees for and taxable income for land possession and use.

Article 18.Determining taxable income from indirect income

18.1.Sum of incomes, specified in Article 11 of this law, shall be taxable income from indirect income.

Article 19.Determining taxable income from other income

19.1.Taxable income attributable to income, specified in the Article 12 of this Law, shall be determined as following:

19.1.1.Taxable income from awards of art or sport competitions, winning prize of festivals and other similar income shall be the amount of the income;

19.1.2.Taxable income of income from winning a quiz, gambling or lottery shall be the amount of the income.

19.2.A micro-enterprise owner taxpayer may impose, pay and report tax on income earned in the tax year, incorporating into the income, specified in Article 8 of this law, at his/her own request.

Article 20.Determining taxable income from non-resident taxpayer's income earned in or derived from Mongolia

20.1.The taxable income of a non-resident taxpayer shall be a total amount of income earned in or derived from Mongolia.

20.2.Income to be paid by a resident taxpayer to an individual who worked in Mongolia, representing a non-resident taxpayer, under a business contract between resident taxpayer and such non-resident taxpayer, shall be specified in the contract.

20.3.If the conditions, stipulated in the Article 20.2 of this law, are not clearly specified in the contract, the taxable income shall be the amount of the expenses, incorporated in the contract price, incurred in relation to that individual’s arrival and work in Mongolia.

CHAPTER FOUR

TAX RATES

Article 21.Tax rates

21.1.Tax shall be imposed on 10% of the income specified in Articles 14 and 18 of this law.

21.2.The following tax rates shall be imposed on income specified in the following sections, clauses or articles of this Law:

21.2.1.Tax rate on income specified in Article 17.1.1 of this law shall be 2 percent;

21.2.2.Tax rate on income specified in Article 19.1.1 of this law shall be 5 percent;

21.2.3.Tax rate on income specified in Article 19.1.2 of this law shall be 40 percent;

21.2.4.Tax rate on income specified in Articles 15.1, 16, 17.1.2, and 17.1.3 shall be 10 percent;

21.2.5.Tax rate on income specified in Article 20.1 shall be 20 percent.

21.3.Tax rate on income specified in Article 15.6 of this law shall be 1 percent.

21.4.The aimag and capital city citizen's Citizens 'Representatives' Khurals shall determine the monthly tax rates imposed on income of individuals earning income specified in Article 12.1.3 of this Law within the limits set forth below:

21.4.1.Tax rate for individuals, engaged in micro-enterprises with no particular location of workplace or booths shall be minimum 1% of the minimum wage rate and a maximum of 50% of the minimum wage;

21.4.2.Tax rate for individuals, engaged in freight services or passenger transportation services shall be minimum 5% of the minimum wage rate and a maximum of equal amount to the minimum wage.

21.5.Notwithstanding Articles 21.2.4 and 21.2.5 of this law, a taxpayer in Mongolia who holds the rights to bonds, shares or unit trusts that are sold openly at the foreign and domestic primary or secondary market shall be imposed 5 percent tax rate on income of interest or dividend earned in connection with the particular shares, unit trusts and bonds.

CHAPTER FIVE

TAX DISCOUNTS AND EXEMPTIONS

Article 22.Tax-exempt income

22.1.The following income shall be tax exempt:

22.1.1.Pensions, benefits, payments, discounts, compensation and one-time grants provided as specifically stated in the legislation;

22.1.2.Income of disabled persons;

22.1.3.Assistance provided by international organizations, foreign governments, legal entities and individuals to the Government of Mongolia, local authorities, legal entities and citizens in an emergency disasters;

22.1.4.Income applicable to head of livestock of herder household or an individual with livestock;

/This sub section was annulled by the law of November 13, 2020/

22.1.5.Payments, interest, and penalties by the Government and the Development Bank of Mongolia for bonds;

22.1.6.Income earned by bodies specified in Article 3.1.4 of the Family Law by transferring the rights of land possession and use, without charges;

22.1.7.Income of value added tax incentives;

22.1.8.Salary and allowance specified in Article 5.9 of this law;

22.1.9.Income earned abroad by a foreign citizen and his/her family member specified in Article 22.1.8 of this Law.

22.2.An individual who pays tax rate at the rates stipulated in Articles 21.3 and 21.4 of this law shall not be exempt from tax specified in this article.

Article 23.Tax discounts

23.1.The below tax discount rates shall apply to taxpayer’s annual taxable income, specified in Articles 7.1.1-7.1.5 and 7.1.7, in particular:

 

Amount of annual taxable income (in MNT)

Tax discount rates

Up to 6 000 000

240 000

6 000 000 - up to 12 000 000

216 000

12 000 000 - up to 18 000 000

192 000

18 000 000 - up to 24 000 000

168 000

24 000 000 - up to 30 000 000

144 000

30 000 000 - up to 36 000 000

120 000

 

36 000 000 and over

-

 

       

 

23.2.Permanent resident taxpayer, who produced or planted below products, will get 50 percent discount on taxable income generated from the particular production only, including:

23.2.1.grains;

23.2.2.potatoes, vegetables and their seeds;

23.2.3.fruits and berries and their seedlings;

23.2.4.fodder plants;

23.2.5.tree seedlings.

23.3.If a citizen of Mongolia purchases an apartment for himself/herself for the first time under mortgage loan, such taxpayer shall exercise tax discount equal to the difference between the maximum interest rate of the mortgage loan determined by the government of Mongolia and the discounted mortgage loan interest rate.

23.4.Where a citizen of Mongolia, constructs a house or purchases an apartment for himself/herself for the first time, with his/her taxable income or loan from bank or financial institution, such taxpayer shall exercise a discount on taxable income equal to the capital/investment spent on such construction of a house or purchase of an apartment. Discount rate shall be up to 6 million togrogs.

23.5.Where a biological-, step-, or adopted child or a child under a custody of a taxpayer citizen of Mongolia is enrolled to or studies at domestic or foreign universities, colleges, specialized or technical colleges, a tax discount shall be applied on his/her income, equal to the tuition, paid, and proven by payment slip, in the tax year during the term of study for the first undergraduate and diploma degree.

23.6.A citizen of Mongolia, who paid tax on income earned from employment during the study term and paid his/her tuition of his/her first time study at colleges, universities, or technical or vocational schools, and shall exercise a discount, specified in Article 23.5 of this Law.

23.7.Where a taxpayer purchased, for own use, solar, wind, geothermal or other renewable energy equipment, coal derived semi-coke fuel, gas and liquid fuel extraction equipment, standard furnace, low pressure furnace/boiler, insulation material, electric or gas heater, discount shall be applied on taxes applicable to income, earned in the same year, equal to the documented payment of such purchase.

23.8.Tax discount shall be applied on taxpayer’s income, for the given year, equal to amount of the donation, proven by payment receipt/slip, provided for the conservation or restoration of cultural heritage.

23.9.Taxpayer’s following income shall be tax discounted:

23.9.1.Donor compensation;

23.9.2.Insurance compensation;

23.9.3.Mongolian State Prize, Government Prize, Mongolian People’s or Honored Award, prize for scientific discovery.

23.10.Citizens of Mongolia, who are registered residents of remote aimags/soums located at a distance of more than 500 km from Ulaanbaatar city, shall be subject to discount for tax on their income specified in Article 6.3.2 of this law, at 50% for aimags/soums located at a distance of more than 500 km from Ulaanbaatar city and at 100% for aimags/soums located at a distance of more than 1000 km from Ulaanbaatar city.

23.11.A list of equipment and supplies, specified in Article 23.7 of this Law, shall be approved by the Government.

23.12.An individual, who pays tax at the rate specified in Articles 21.3 and 21.4 of this law, shall not be entitled to exemptions, stated in this article.

23.13.A taxpayer shall choose one of the options for exemptions, specified in Articles 23.3 and 23.4 of this law.

23.14.The tax discount shall not exceed the tax amount reported and payed within the deadlines specified in this law. Tax discounts, except those specified in Articles 23.1 and 23.9 of this law shall be refunded in accordance with Article 28 of this law.

23.15.The head of the state administrative body in charge of taxation shall approve a procedure on exemptions set forth in Article 22.1 of this law and discounts specified in this law.

Article 24.Deducting taxes levied on foreign countries from payable taxes

24.1.A tax paid by a permanent resident of Mongolia to a foreign country shall be deducted from taxes payable by the taxpayer in the given tax year.

24.2.Tax amount deductible pursuant to Article 24.1 hereof shall not exceed the tax amount payable by the taxpayer to Mongolia in the given tax year.

24.3.The tax imposed on foreign countries according to Article 24.1 of this Law shall be deducted from taxes payable in accordance with Article 23 of the Corporate Income Tax Law.

24.4.The head of the state administrative body in charge of taxation shall approve procedures for validating tax paid in foreign countries and deducting from taxes payable.

CHAPTER SIX

TAX IMPOSITION, PAYMENT TO THE BUDGET, REPORTING, DEDUCTING AND REFUNDING

Article 25.Tax deductibles and payment to the budget

25.1.A withholder specified in Article 4.1.11 of this law shall adhere to the following regulations for tax imposition:

25.1.1.Tax imposed on the income, specified in Articles 14 and 18 of this law, shall be subject to tax rate, specified in Article 21.1 of this Law, and shall be transferred to the relevant budget;

25.1.2.Tax imposed on the income, specified in Articles 16.1.2 to 16.1.4 of this law, shall be subject to tax rate specified in Article 21.2.4 of this Law, and shall be transferred to the relevant budget;

25.1.3.Tax imposed on the income specified in Articles 17.1.1 of this law shall be subject to tax rate, specified in Article 21.2.1 of this Law, and shall be transferred to the relevant budget;

25.1.4.Tax imposed on the income specified in Articles 19.1.1 of this law shall be subject to tax rate, specified in Article 21.2.2 of this Law, and shall be transferred to the relevant budget;

25.1.5.Tax imposed on the income specified in Articles 19.1.2 of this law shall be subject to tax rate, specified in Article 21.2.3 of this Law, and shall be transferred to the relevant budget;

25.1.6.Tax imposed on the income specified in Articles 20.1 of this law shall be subject to tax rate, specified in Article 21.2.5 of this Law, and shall be transferred to the relevant budget;

25.1.7.Income of interest and dividends by a taxpayer who holds bonds, shares or unit trusts of a taxpayer in Mongolia for open trading at foreign and domestic primary and secondary capital markets shall be subject to tax rate, specified in Article 21.5 of this law, and transferred to relevant budget.

25.2.Banks and financial institutions will act as a withholder and shall impose tax and transfer to relevant budget each time it pays interest on the taxpayer's bank accounts and deposits.

25.3.Tax exemptions, specified in Article 22.1.2 of this law, shall be deducted by the withholder based on evidences relevant to imposition of tax on personal income of disabled persons.

25.4.Each time it issues an income to an individual, a withholder shall make entries, either online or on the individual’s income and tax record book, of amount income issued and attributable tax withheld, and shall submit a year-to-date report to the corresponding tax office on quarterly basis.

25.5.When granting a tax discount specified in Article 23.1 of this law to a taxpayer, a withholder shall divide taxable income and discount into 12 months equally and provide on a monthly basis.

25.6.Withholder shall transfer withheld tax of a taxpayer to relevant budget within the 10th of the following month, except the cases specified in Article 25.2 of this law.

Article 26.Self-determination of tax and payment to the budget.

26.1.A taxpayer shall accurately determine his/her taxable income in accordance with this law and pay to relevant budget within the following timeframe:

26.1.1.Impose and pay, within 15th day of the following month, a tax rate specified in Article 21.2.4 of this Law on income specified in Articles 15.1, 16.1.1, 17.1.2, and 17.1.3 of this law;

26.1.2.Impose and pay, within 15th day of February of the following year, a tax rate specified in Article 21.2.4 of this law, on income specified in Articles 16.1.2, 16.1.3 and 16.1.4 of this law, derived from abroad by a permanent resident taxpayer of Mongolia in the tax year;

26.1.3.Impose and pay, within 15th day of February of the following year, a tax rate specified in Article 21.2.1 of this law on income, specified in Article 17.1.1 of this law, derived from abroad by a permanent resident taxpayer of Mongolia in the tax year;

26.1.4.Impose and pay, within 15th day of February of the following year, a tax rate specified in Article 21.1 of this law on income, specified in Articles 14 and 18 of this law, derived from abroad by a permanent resident taxpayer of Mongolia in the tax year;

26.1.5.Impose and pay, within 15th day of February of the following year, a tax rate specified in Article 21.2.2 of this law on income, specified in Article 19.1.1 of this law, derived from abroad by a permanent resident taxpayer of Mongolia in the tax year;

26.1.6.Impose and pay, within 15th day of February of the following year, a tax rate specified in Article 21.2.3 of this law on income, specified in Article 19.1.2 of this law, derived from abroad by a permanent resident taxpayer of Mongolia in the tax year;

26.1.7.Impose and pay, within 15th day of February of the following year, a tax rate specified in Article 21.3 of this law on income, specified in Article 15.6 of this law.

26.2.Local administrative unit authorized to issue licenses for running micro-sales, trade and services shall issue licenses or certificates, and timely collect and pay to the state budget the taxes specified in Article 21.4 of this law.

26.3.Passenger transport and freight forwarding service providers, specified in Article 4.1.3 of this law, shall hold the license or tax payment certificates with himself/herself or in the vehicle.

26.4.The head of the state administrative body in charge of taxation shall approve the template of a certificate of tax payment by a taxpayer, specified in Article 26.2 of this law.

26.5.A taxpayer with no legal obligation to report tax, may, at own will, develop a tax return for the given year, deliver to the line tax authority within February 15 of the following year, and make year-end reconciliation.

26.6.A taxpayer, who worked for a resident business entity and earned income from a non-resident business entity, shall pay the tax on the incomes specified in Articles 14 and 18 of this law within 10th of the following month, develop a tax return for the given year and deliver to the line tax authority within February 15 of the following year.

Article 27.Timeframe for tax return submission

27.1.Withholder shall submit, to relevant tax office, a quarterly tax return no later than 20th day of the first month of the next quarter and an annual tax return no later than 15th of February of the following month with an up to date entries of taxes imposed and withheld on incomes, specified in accordance with Articles 14, 16.1.2, 16.1.3, 16.1.4, 17.1.1, 18, 19.1.1, 19.1.2 and 20.1 of this law.

27.2.Taxpayer shall submit, to the relevant tax authority, a tax return no later than 15th day of February of the following year, with up-to-date entries of taxes imposed on incomes specified in accordance with Articles 15.1, 15.6, 16.1.1, 17.1.2 and 17.1.3 of this law.

27.3.Local administrative unit authorized to issue licenses for micro-sales, trade, work and services shall submit a tax return, collected pursuant to Article 26.2 hereof, to the relevant tax authority no later than 15th days of February of the following year.

27.4.Permanent resident taxpayer of Mongolia shall submit, to the relevant tax authority, a tax return on taxes imposed on income, specified in Articles 14, 16.1.2, 16.1.3, 16.1.4, 17.1.1, 18, 19.1.1 and 19.1.2 of this law and derived abroad, no later than 15th day of February with up-to-date entries.

27.5.A taxpayer, who is subject to tax discounts or exemptions other than those specified in Articles 22.1.2, 22.1.4, 22.1.7 and 23.1 of this Law, shall be obliged to submit a tax return, which shall serve as the basic document to exercise tax discounts or exemptions.

27.6.A taxpayer may develop a tax return for the given tax year prior to the end of the tax year and make relevant calculations/payments in advance.

Article 28.Tax refund

28.1.Relevant tax office shall review and finalize calculations, as per the below procedures, of overpayment and underpayment of taxes specified in the tax return submitted by taxpayer or withholder pursuant to the Articles 27.1, 27.2, 27.4, 27.5 and 27.6 of this law, in particular:

28.1.1.Tax refund amount for the tax year will be limited by Article 23.14 of this law;

28.1.2.Taxpayer shall first exercise discounts specified in Article 23.1 of this law;

28.1.3.Taxpayer shall choose and exercise discounts, except those specified in Article 23.1 of this law, within the limits specified in Article 28.1.1;

28.1.4.Taxpayer shall not exercise partially the discounts specified in this law;

28.1.5.Discounts, except those set forth in Article 23.4 hereof, shall not be transferred to the next tax year.

28.2.Where a taxpayer’s paid amount is smaller than the taxable amount in the tax year, as calculated under the procedure set forth in Article 28.1 hereof, the line tax authority shall notify the taxpayer and finalize the calculation and shall have difference paid.

28.3.Where a taxpayer’s paid amount is larger than the taxable amount in the tax year, as calculated under the procedure set forth in Article 28.1 of this law, overpaid amount shall be resolved in accordance with Article 49, the General Taxation Law.

28.4.The overpaid tax, specified in Article 28.3 of this law, shall be refunded to the taxpayer under following procedures:

28.4.1.The refund shall be returned to the taxpayer through the treasury account of its relevant administrative unit under the respective tax authority;

28.4.2.The tax authority shall review the tax refund within 20 working days after the tax return submission deadline, specified in Article 27 of this Law, and submit it to the Treasury Unit of subordination;

28.4.3.The refund, specified in Article 28.4.1 of this Law, shall be paid within the second quarter of the following year.

28.5.The Cabinet Member in charge of finance and budget matters shall approve procedures that regulate relations concerning refund of and control over the overpaid taxes by taxpayer, specified in Article 28.4 of this law.

CHAPTER 7

OTHER

Article 29.Entry into force

29.1.This law shall come into force on January 1, 2019.

 

 

G.ZANDANSHATAR CHAIRMAN, STATE GREAT KHURAL