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Double Taxation Agreement Mongolia

Many countries have tax treaties with other countries (also known as double taxation treaties or DTAs) to avoid or mitigate double taxation. Double taxation is the collection of taxes by two or more jurisdictions on the same declared income, property or financial activities. Double liability is reduced in different ways, for example: a credit for taxes paid abroad should be available if it is based on an applicable double taxation (DTT) convention. If certain conditions are met, taxes paid abroad without T&T signed with Mongolia can also be set off against taxes payable in Mongolia. In order to avoid double taxation, Mongolia proposes to apply the credit method. The amount of foreign tax paid is allowed as a deduction of Mongolian tax payable on the same income or capital. However, the amount of this tax credit may not exceed the amount of tax payable on the same amount of income in Mongolia. Mongolia`s double taxation treaties with the United Arab Emirates and Kuwait were terminated on 1 January 2015 and 1 April 2015 respectively. Mongolia`s double taxation agreements with Luxembourg and the Netherlands were denounced on 1 January 2014 due to the lack of balance and equity rights between the parties.

A person`s liability for Mongolian income tax is determined by the person`s residency status for tax purposes and the person`s derived source of income. Income tax is currently levied at a flat rate of 10% for Mongolian taxable persons and 20% on Mongolian income for non-resident taxpayers. The fiscal year is the calendar year. Another approach is for the countries concerned to conclude a tax treaty containing rules for the avoidance of double taxation. More than 3000 double taxation (ASA) treaties are in force worldwide. Australia currently has no double taxation agreement or visa-free regime with Mongolia. As a rule, the following allowances and benefits are considered work income: In general, foreigners need a Mongolian visa to enter the country/jurisdiction. A person is considered to be resident for tax purposes in Mongolia if he or she stays in Mongolia for a consecutive period of 12 months of 183 days or more.

The period of 183 days shall be calculated on the basis of the number of days from the date of entry into Mongolia and, in the case of several entries, determined on the basis of the total number of days of stay of a taxable person in Mongolia. Personal taxable persons in Mongolia are considered to be resident and non-resident taxable persons. . . .