KPMG Newsletter August 2016

KPMG Newsletter August 2016

KPMG Newsletter August 2016



The excitement of the election, ASEM Summit and Naadam has now passed. By all accounts, the ASEM Summit ran very smoothly and the new Mongolian government ministers have all been sworn in. The results of the election have caused some disruptions to previously announced regulations. We hope this newsletter provides you with useful information on the impact of these events and other recent announcements. If you have any questions as to how these changes may impact you or your business, then please get in touch.


Social Insurance Refund

Employees may overpay social insurance contribution when they work for more than one employer and total paid contribution exceeds employee cap of MNT 192,000 per month. In this case, individuals are able to claim for refund of an overpayment by end of the financial year at the Social Insurance Office. 

In addition to that, when expatriates leave the country after their assignment ends, they are entitled to unemployment benefits up to monthly rate of 45%-70% of MNT 1,920,000 for 76 working days. Monthly rate varies depending on number of years social insurance contribution is paid for. Expatriates are eligible for this benefit (SHI Refund) if: 

-they have paid social insurance contribution for at least 24 months in total; and 

-they have paid social insurance contribution for at least the last 9 months’ consecutively.

Note that the benefit will be paid only to the employees’ local bank account. 


VAT Refund and VAT Lottery

Since the announcement, many taxpayers have been taking advantage of the 20% VAT refund and the VAT lottery system. This system is available to both Mongolian citizens and foreigners, as long as the following criteria is met:

  • Individual has a Mongolian local bank account; and
  • Individual has a Taxpayer number from registration with the MCTA.

It was announced that the website is being translated into English, however, this has not yet occurred. We have prepared a guide on how to register for the VAT refund and lottery. If you would like a copy then please contact us.


Electronic Social Insurance Filing Delayed

Following the Electronic Signature Law (15 Dec 2011), in an effort to make Social Insurance filing even more secure, easier and paperless, effective from 1 June 2016 the Social Insurance Authority requires all entities to use electronic signatures and file the returns online. The new system launch date is delayed for a couple of months due to the election and extended trial tests. The Social Insurance Authority should announce the go-live date soon.

For more information about how to obtain electronic signature, please get in contact with us.


New Infringement Law

On 4 December 2015, the Administrative Liability Law (27 Nov 1992) is nulliefed and the New Infringement Law was passed. The new law will comes into effect starting from 1 September 2016.  

Under the new legislation, fines range from 10 to 10,000 units for individuals and from 100 to 50,000 units for legal entities (one unit equals to MNT 2,000 tugrugs) which is significantly higher than the fine imposed by the current Administrative Liability Law. Previous law will remain in effect until 1 September 2016.


Did You Know

Individuals in Mongolia who are Social insurance payers can get discounts of up to 80% on the listed prescription drugs if they have a prescription provided by a local GP (or state district hospitals). Over 400 prescription drugs are approved on the list with reduced prices by Nationals Council of Social Health Insurance.


Upcoming Key Dates

Please be aware of the following key events in the coming months.

PIT Monthly Payment Deadline 10 August 2016
SHI Reporting & Payment Deadline 5 September 2016


Meet the Team

Nicole Woodcock is the new Country Manager for KPMG Mongolia Tax team. Nicole has previously worked within the KPMG offices in India and Australia. Nicole specialises in expatriate tax compliance and advisory. Nicole also has an in-depth knowledge of the energy and resources industry, having previously worked for PETRONAS at their Australian operations.




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