RE: MATD29 Apr 2025 02:17
🛢️ Oil Sector Taxation in Mongolia
Mongolia's tax regime for the oil sector is distinct from general corporate taxation. Entities involved in petroleum exploration, extraction, and sales are subject to specific tax provisions:
-Corporate Income Tax (CIT): Standard CIT rates apply, but there are no special tax incentives or waivers for oil companies. Entities with annual revenue up to MNT 300 million are taxed at 1%, those with revenue up to MNT 6 billion at 10%, and any income exceeding MNT 6 billion is taxed at 25% .
-License Transfer Tax: Income from the sale or transfer of petroleum exploration or mining licenses is subject to a 10% withholding tax on a gross basis .
-Excise Tax: Excise tax is levied on petroleum products, including gasoline and diesel fuel. The rates vary depending on the type and quantity of the product .
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🏢 Corporate Income Tax (CIT) in Mongolia
Mongolia employs a progressive corporate income tax system:
1% on annual revenue up to MNT 300 million.
10% on the first MNT 6 billion of taxable income.
25% on taxable income exceeding MNT 6 billion .
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Certain income types are taxed at different rates:
-Dividends, Royalties, Interest: 10% for resident entities; 20% for non-residents.
-Sale of Rights: 30% tax on income from the sale of rights, including petroleum licenses.
-Sale of Immovable Property: 2% tax .
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📌 Additional Considerations
Tax Incentives: Companies in remote areas (e.g., 500 km from Ulaanbaatar) may receive tax rebates, but these do not apply to oil sector entities .
Loss Carryforward: Taxpayers can offset trading losses over four years, subject to certain conditions .
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