Proposed amendment to Business Income Tax Law (BIT Law amendment)
- 2016-10-05
- 211
The Government of Mongolia (the GoM) wishes to support the SMEs at the time when Mongolian economy slows down. To this end, the following amendment is being proposed to the Law on Business Income Tax. New Articles 19.14-19.17 will be added to the BIT law if the proposed amendments were to be approved.
Proposed Article 19.14 is read as:
90% reduction will be provided to the income earned from the activities in the following sectors when a taxable income under the BIT Law is less than 1.5 billion MNT.
Sectors are:
- Horticulture, and animal husbandry and their ancillary activities
- Food production
- Knitting and clothes making industry
- Construction materials production
Taxable income defined as:
An income earned in a relevant reporting year will be ‘the combined amount of taxable incomes of a taxpayer and its affiliates’.
Election of either Article 19.1 or Article 19.14 for tax reduction
A tax payer must elect one of the reductions offered under the BIT Law Article 19.1 and Article 19.14.
The BIT Law Article 19.1 offers a tax reduction of 50% in the income earned from products outlined below if those products are produced by a tax payer. They are: milk, fruits, cereals, potatoes, vegetables, and fodder crops
If approved, these amendments will stay in force from January 1, 2017 to January 1, 2021.