Mongolia on September 30, 2024, deposited its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI), which became effective for Mongolia on January 1, 2025. According to the OECD MLI database, 19 jurisdictions out of 26 partner countries that Mongolia has income tax treaties with have already been listed under the MLI as of February 2025.
In addition, the following recent direct and indirect tax changes were recently introduced in Mongolia:
- Tax incentives for corporate socially responsible investments: In the last quarter of 2024, significant amendments were made to the corporate income tax law in Mongolia with a focus on promoting corporate social responsibility and encouraging investments in various sectors that contribute to the welfare of society and the environment. These changes, which will remain in effect until January 1, 2035, allow businesses to deduct investments made in fixed assets for the purpose of supporting the following activities within the scope of social responsibility, and financial support and donations granted to other unrelated entities not exceeding 1% of the taxable income for the relevant tax year.
- Increase in vehicle taxes and road fees: Vehicle taxes and road fees in Ulaanbaatar city were increased from MNT 36,018 to MNT 162,081 and from MNT 30,000 to MNT 150,000, respectively, effective January 1, 2025.
- Introduction of excise taxes for sweetened beverages: Excise taxes were introduced for beverages and drinks that contain sugar and sugar substitutes exceeding five grams per 100 milliliters in Mongolia effective January 1, 2027, according to the following schedule:
- In 2027: MNT 500 per liter
- In 2028: MNT 525 per liter
- In 2029: MNT 550 per liter
Read a March 2025 report prepared by the KPMG member firm in Mongolia