As the individual’s tax filing deadline is approaching, we would like to present overview of the tax issues applicable to foreign individuals staying in Mongolia. If you have any questions regarding this issue, please contact us to discuss.
A foreign individual is considered as Mongolian tax resident if he or she resides in Mongolia for 183 or more days in a tax year or owns a residence in Mongolia (Article 6.1.1 and 6.1.2 of the Law of Mongolia on Personal Income Tax [“PIT”]). Above days are calculated based on the number of days of a calendar year from the day of entry into Mongolia and in case of multiple entries, it will be determined based on the total days of stays in Mongolia.
A foreign individual is considered as a non-resident taxpayer in Mongolia if he or she has no residence in Mongolia and has not stayed in Mongolia for 183 or more days in a tax year (Article 7.1 of the PIT law).
If foreign individual is resident taxpayer of Mongolia, his or her income earned in Mongolia as well as income received from any source outside of Mongolia (i.e. worldwide income) is subject to tax in Mongolia (Article 9.1.1 of the PIT law).
Regarding non-resident taxpayer, only income earned in Mongolia is subject to tax in Mongolia (Article 9.1.2 of the PIT law).