Mongolia Corporate Tax Guide 2026

Overview — Corporate Tax in Mongolia

Corporate tax in Mongolia is governed by the Corporate Income Tax Law of Mongolia and administered by the Mongolian Tax Authority (MTA). A company is tax resident if it is incorporated under Mongolian law or if its place of effective management is in Mongolia. Resident companies are taxed on worldwide income; non-resident companies with a permanent establishment are taxed on Mongolia-source income only. Companies must register for tax with MTA and obtain a Taxpayer Identification Number (TIN). The tax year aligns with the calendar year, though companies may apply for a different accounting period with MTA approval. Annual returns are due by 15 February of the following year.

Standard Corporate Tax Rate — 25%

The standard CIT rate for resident companies in Mongolia is 25% of chargeable profits. Non-resident companies with a permanent establishment in Mongolia are also taxed at 25% on Mongolia-source income. Taxable profit is computed as gross revenue less allowable deductions including operating expenses, depreciation (capital allowances), interest costs (subject to thin capitalisation rules), and losses carried forward. Losses may be carried forward for up to 5 years. Capital gains are included in ordinary income and taxed at the standard corporate rate. Withholding tax on dividends paid by Mongolian companies is 10% (final tax for residents).

Small Business Rate — 10%

Small business entities benefit from a reduced CIT rate of 10% on chargeable profits. To qualify, the business must meet the following criteria:

• Annual revenue does not exceed approximately MNT 1.5 billion
• The entity is a resident company incorporated in Mongolia
• The entity is not a mining, oil, or petroleum company
• The entity is not a branch of a foreign company

The 10% rate applies to the entire taxable profit of qualifying small businesses. The threshold is reviewed periodically by the Ministry of Finance. Small businesses must still comply with all CIT filing and payment requirements. The reduced rate is designed to encourage SME development and entrepreneurship in Mongolia.

Mining Sector Taxation

Mongolia's mining sector is the dominant part of the economy (coal, copper, gold, fluorspar) and is subject to a specific fiscal regime. Mining companies pay the standard 25% CIT plus a royalty calculated on sales revenue (typically 5-10% depending on the mineral). Additional taxes may apply under stability agreements and investment contracts with the Government of Mongolia. The Windfall Profit Tax on copper and gold concentrates was repealed but may be reintroduced. Mining companies benefit from certain VAT exemptions on imported machinery and equipment. The Mineral Resources and Petroleum Authority (MRPAM) oversees the mining sector in coordination with MTA.

Branches of Foreign Companies

Foreign companies operating through a branch in Mongolia are taxed at 25% on Mongolia-source profits, the same rate as resident companies. However, branch profits remitted to the head office are not subject to additional branch profit remittance tax (unlike some jurisdictions). Foreign companies may choose to incorporate a Mongolian subsidiary (LLC or JSC) for operational flexibility. The branch must register with the State Registration Authority and MTA, and file annual tax returns. Transfer pricing rules apply to transactions between the branch and its head office or related parties.

Capital Allowances (Depreciation)

Mongolia uses a depreciation system for tax purposes. Rates vary by asset category:

• Buildings & structures — 5-10% per annum (straight-line)
• Plant & machinery — 10-20% per annum (declining balance)
• Motor vehicles — 20% per annum (declining balance)
• Computers & office equipment — 30% per annum (declining balance)
• Intangible assets — 10-20% per annum (straight-line)

Mining companies may claim accelerated depreciation for certain capital assets under their investment agreements. Research and development costs may be expensed immediately or capitalised and amortised over 3-5 years.

FAQs

What is the penalty for late filing of corporate tax returns?

Late filing attracts a penalty of MNT 200,000 plus 0.05% interest per day on the unpaid tax. Additional penalties may apply for failure to maintain proper records or for tax evasion.

Can foreign companies claim treaty relief?

Yes, Mongolia has over 40 double tax treaties. Treaty relief may reduce withholding tax rates on dividends, interest, and royalties paid to non-residents. Treaty benefits require a Certificate of Tax Residency from the home country.

Is there a minimum tax for loss-making companies?

Mongolia does not have a turnover-based minimum tax. Loss-making companies may carry forward losses for up to 5 years against future profits. Consistent losses may trigger MTA audit scrutiny.

Disclaimer

This guide provides general information about Mongolian corporate tax for the 2026 tax year. Tax laws and rates may change. Always consult with a qualified Mongolian tax advisor or the Mongolian Tax Authority for advice specific to your situation. InvestmentKit does not provide tax advice.