PRESIDENT PROPOSES CHANGES TO THE REVISED DRAFT OF LAW ON CORPORATE INCOME TAX
Today, President of Mongolia Khaltmaagiin Battulga forwarded an official letter to Chairman of the State Great Khural G.Zandanshatar regarding a proposal on changes to the revised draft of the Law on Corporate Income Tax which is under consideration of the ongoing extraordinary session of the State Great Khural.
President Battulga submitted the proposal on account of his belief that “…the revised draft encompasses several provisions that will leave negative outcome, including detrimental effects on the tax interests of Mongolia caused by the significant reduction of tax rates for foreign investors, foreign corporate entities and local entities associated with them, and tax inequality among domestic and foreign corporate entities due to the significant reduction of tax rates for major national companies operating in the mining sector, and this fails to comply with the fundamental concept of the revision which aims to support small and medium-sized enterprises (SMEs) through tax policy.”
One. Concerning some provisions in the revised draft on reducing the rates of tax paid, reported, and withheld by foreign-funded companies implementing large-scale mining projects with strategic importance to the Mongolian economy, as well as multinational corporations investing in these companies that will consequentially lead to deterioration in Mongolia’s international taxation, changes have been proposed on multiple clauses.
Two. Regarding some newly added provisions in the revised draft on significantly reducing the rates of tax imposed on major companies operating in the mining sector and hold multiple mining licenses that will put them at a higher tax advantage than SMEs, changes have been proposed on two sections and a clause.
Three. Regarding some provisions in the revised draft that will lead to increased administrative and tax pressures on SMEs while the law is being revised in the name of supporting SMEs, changes have been proposed on multiple clauses.