Explore the requirements and rules that apply to indirect taxes in Mongolia.
What supplies are liable to the standard rate?
Are there any reduced rates, zero- rates or exemptions and if so, what do they apply to?
Zero-rated supplies include exports of goods and services; international transport services; services related to international air travel; services provided in a foreign jurisdiction (including tax-exempt services); services provided to foreign citizens not residing in Mongolia during the provision of services (including tax-exempt services); and final mineral products exported.
Exempt supplies include gold; certain agricultural products produced domestically; educational services; medical services; governmental organization’s services; public transport services; tour operator services; financial services; insurance services, small and medium manufacturing purpose equipment; civil aviation aircrafts and spare parts; renewable energy research and production equipment, its accessories and spare parts.
Any entity or individual with sales revenue subject to VAT that exceeds MNT50 million annually.
Is voluntary registration possible?
Yes, provided the entity’s sales revenue subject to VAT has reached MNT10 million annually.
Is voluntary registration available for an overseas company or a fiscal representative?
Yes, registered entities cannot recover VAT paid during import or purchase of the following goods, work or services:
Can an overseas company recover VAT if it is not registered?
How long does it typically take to obtain a VAT refund following a return filing?
Under the VAT law, a refund should be obtained within 69 working days after submitting an application to the tax authority. In practice, however, it is often difficult to obtain a VAT refund for excess input tax credits.
Yes, a VAT electronic invoice is only considered valid if it includes the following:
Yes, when a person or legal entity of Mongolia purchases goods, work, or services not declared at the customs, from an entity that does not reside or stay in Mongolia, it shall impose and withhold VAT on the value of the goods, work, or services and make payment to the Authority. Therefore, a Mongolian resident buyer shall be obliged to withhold VAT of 10 percent on the service fee transferred to non-residents.
Please note the withholding VAT is not creditable for the Mongolian entity receiving service or goods, so this is a non-recoverable cost. While WHT VAT is often a tax cost to the non-resident entity, the withholder is ultimately responsible for this burden, and in the case of unpaid withholding taxes, the Mongolian Tax Administration (MTA) will seek recourse from the Mongolian buyer.
Other indirect taxes include the following:
All information within this guide is provided by KPMG professionals in Mongolia and based on information available as of September 2019.