Tax on property income in Mongolia
Taxation Researcher | September 28, 2020
Effective Tax Rate on Rental Income
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Global Property Guide
Nonresidents are taxed on their Mongolian-sourced income. Married couples are assessed and taxed separately.
Nonresident individuals are subject to the same withholding tax rates as nonresident companies. Income of nonresident individuals is taxed at a flat withholding tax rate of 20%.
Rental income earned by nonresident individuals is taxed at a flat rate of 10%, withheld by the tenant.
CAPITAL GAINS TAX
Nonresidents earning capital gains realized from selling real property are taxed at a flat rate of 20%. The tax is levied on the gross proceeds and no deductions are allowed.
Property tax is levied at a flat rate of 0.60% on Mongolian real property. The tax base is the property value is that registered with the government registration authority. If the property is unregistered, the tax base is the property´s insured value. If the property is both unregistered and uninsured, the tax is levied on the property´s accounting value.
Income earned by companies is 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$2,985,075). Income-generating expenses are deductible when calculating taxable income.
INCOME TAX 2020
|TAXABLE INCOME, MNT (US$)||TAX RATE|
|Up to 6 billion (US$2,985,075)||10%|
|Over 6 billion (US$2,985,075)||25% on band over US$2,985,075|
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.