Mongolia taxes residents on worldwide income and non-residents on Mongolia-source income only. Mongolia introduced CFC rules in 2020, under which a CFC is treated as a resident taxpayer for Mongolian tax purposes (an exception applies to a CFC established specifically for IPO purposes). Mongolia operates a self-assessment system.
The Mongolian tax year is the calendar year.
25% top rate under a progressive scale. Mongolian resident entities are taxed on worldwide income; non-resident entities are taxed on Mongolia-source income only.
An individual present in Mongolia for 183 days or more in a tax year is a resident, taxed on worldwide income at rates up to 20%.
10% standard rate on the supply of goods and services. Exempt supplies include education, healthcare, financial services, and residential property sales; exports are zero-rated.
An individual is a tax resident if present in Mongolia for 183 days or more in a tax year. Mongolian resident entities are taxable on aggregate annual worldwide income; non-resident entities conducting business activities in Mongolia are taxed on Mongolia-territory and Mongolia-source income only.
A non-Mongolian entity has a Mongolia permanent establishment through a fixed place of business or a dependent agent habitually concluding contracts in Mongolia on the entity's behalf, following the OECD Model Treaty definition as applied under Mongolian domestic law and any applicable tax treaty.
Older KPMG country tax profiles (2015 and 2018 editions) state plainly "Mongolia does not have CFC rules," but a materially more recent source (Moore Global, 2025) confirms CFC rules were specifically introduced in 2020, meaning the older KPMG profiles were accurate at the time of publication but are now outdated rather than genuinely conflicting. Under the current rules, a CFC is treated as a resident taxpayer for Mongolian tax purposes, with an exception for a CFC established specifically for IPO purposes.
A thin capitalization rule applies to direct shareholder loans, under which interest paid in excess of a 3:1 debt-to-equity ratio is non-deductible and is instead treated as a dividend. This is applied on an investor-by-investor basis rather than to the company as a whole, so no restriction applies to interest not paid to an investor specifically. Separately, deductible interest expense on related-party loans is further limited to 30% of EBITDA. Where an individual permanently residing in Mongolia controls a taxpayer entity, no deduction at all is allowed for interest paid on a loan from that individual to the controlled entity - the entire payment is treated as a dividend.
Mongolia does not use an elective check-the-box classification system; entity classification generally follows the entity's actual legal characteristics. Mongolia does not have a comprehensive ATAD2-style anti-hybrid regime, though Mongolia's own CFC regime (see Tax System above) addresses related cross-border deferral concerns.
No foreign bank account or foreign financial asset reporting regime exists requiring residents to separately disclose foreign accounts; foreign income is reported through the standard annual tax return.
Mongolia does not provide a broad participation exemption for foreign dividends; relief from double taxation is available through Mongolia's foreign tax credit system, coordinated against Mongolia's own CFC regime to avoid double-counting attributed profits.
Mongolia has a real foreign tax credit regime available to both individuals and companies for foreign tax paid on foreign-source income also taxed in Mongolia, capped at the Mongolian tax otherwise due on that income.
Mongolia has approximately 30 double taxation agreements. Dividend withholding is 10% for Mongolian resident recipients but 20% for foreign tax residents (reducible under an applicable treaty). Treaty relief requires a tax residency certificate from the foreign country's competent authority plus relevant supporting transaction documents.