Mongolia legal and accounting and tax considerations in 2023
- Mongolia companies with income under MNT 3 billion ($2.15 million) are taxed at a flat 10%. Above this amount, companies are taxed at 25%. Personal income tax is a flat 10%;
- Annual audited financial statements and corporate tax return is submitted to the Mongolian Taxation Office. It is usually possible to obtain an audit exemption;
- Resident companies and individuals settle their tax liabilities either by monthly payments, third party withholdings, or a combination of both;
- Mongolia resident companies are required to withhold tax at a rate of 20% from the payments to foreign companies unless reduced by a double taxation treaty. However, Mongolia’s 35 double tax treaties minimize withholding tax for service fees, dividends, interest, royalties, and branch profits;
- An individual is considered tax resident if he is present in Mongolia for at least 183 days per year;
- Annually, medium sized business pay corporate income tax, health insurance contributions, social security contributions, tax on interest, property tax, stamp duty, and also value added tax.
- Healy Consultants can assist our Clients to efficiently and completely discharge the annual accounting and auditing obligations of their Mongolia company, for example through sourcing of Mongolia accountants and implementing financial accounting software;
- It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.
Legal and compliance
- The minimum amount of paid up capital to be invested in a foreign-owned company is US$100,000. There must be at least one shareholder and one director;
- All business entities must submit annual audited financial statements by March 31st of each year. Quarterly financial statements must also be submitted by the 20th of the month after each quarter’s end;
- A Mongolia company secretary is not required when forming a company in Mongolia, however we recommend one be appointed to ensure compliance with the corporation act;
- All business activities conducted in Mongolia receive government approvals and permits and licenses. For instance, general trading and services activities need a Trading Business License. Mining companies require a Mining Business License.