INDIVIDUAL TAXATION

Residents are taxed on their worldwide income. Married couples are assessed and taxed separately.

INCOME TAX

Income tax is imposed on the following income: (1) salaries, wages, bonuses, incentives, and other similar income from employment; (2) income from the provision of professional services and carrying on of business activities; (3) income from property; (4) income from the sale of movable and immovable property, including shares and securities; (5) income of a herdsman family and individuals with livestock; (6) income from the creation of scientific, literary and artistic works, inventions, product designs and useful designs; (7) income from organizing and participating in sports competitions, art performances, and similar income; (8) income from quizzes, gambling and lotteries; and (9) fringe benefits, unless exempted

Income tax is levied at a flat rate of 10%. Taxable income is computed by deducting income-generating expenses and tax credits from the gross income.

The following tax credits are available:

• A tax credit of MNT84,000 (US$42)
• A tax credit equal to documented tuition payments for a child who attends a domestic or foreign college, university, or vocational school
• A tax credit for a student of a college, university, or vocational school who has paid tax on income from employment in the course of study as well as tuition fees

RENTAL INCOME
Rental income from leasing property in Mongolia is considered as part of the income and taxed at a flat rate of 10%.

CAPITAL GAINS TAX

Capital gains realized from selling real property is considered as ordinary income and taxed at a flat rate of 2%. The tax is levied on the gross proceeds and no deductions are allowed.

PROPERTY TAX

Property Tax

Property tax is levied on Mongolian real property at a rate of 0.60% to 1%. The applicable tax rate depends on several factors, such as the location of the property, the size of the property, and other factors.

CORPORATE TAXATION

INCOME TAX

Income earned by companiesis liable for corporate income tax of 10% for taxable income up to MNT6 billion (US$2,985,075). Companies are liable for corporate income tax of 25% for taxable income exceeding MNT6 billion (US$2,985,075). Income-generating expenses are deductible when calculating taxable income.

CAPITAL GAINS TAX

Capital gains realized from selling real property is considered as ordinary income and taxed at a flat rate of 2%. The tax is levied on the gross proceeds and no deductions are allowed.