Mongolia’s government is drafting a new VAT Bill for 2025, which was submitted to the parliament. The new VAT bill proposes a simplified VAT system, higher registration thresholds, and faster input VAT recovery.
The government has also launched a public consultation on the new VAT bill.
Comments can be submitted until 12 April 2025.
Key measures of the 2025 VAT BillÂ
- The new VAT Bill states that all goods and services are subject to VAT unless specifically exempted;
- The 2025 VAT Bill simplifies exemptions, reducing them from 49 to 16 clauses. The 2016 VAT Act has 49 clauses. The key exemptions also include financial services, shares and securities sales, the exportation of non-finished minerals, personal computer imports for personal use, and religious activities;
- Elimination of input VAT recovery on fixed asset purchases spread over 5 or 10 years;
- The VAT registration threshold is now MNT 400 million in 12 months, with optional registration available at 20% of this threshold;
- The VAT remittance deadline has been extended from the 10th of the month to the 15th of the month;
- VAT remittance to Mongolian revenue can be deferred for up to 3 months for taxpayers with a good track record.
VAT relief measures
The 2025 VAT Bill also introduces VAT relief measures for consumers, such as:
- 100% VAT relief on monthly purchases up to MNT 500,000;
- 50% VAT relief on monthly purchases between MNT 500,000 and MNT 800,000;
- 20% VAT relief on monthly purchases exceeding MNT 800,000.
Reverse-charge VAT (RCVAT)
The 2025 draft Bill regarding reverse-charge VAT (RCVAT) contains uncertainty. It is unclear whether taxpayers will be required to reverse-charge VAT on payments to foreign service providers or continue withholding 10% VAT from such payments under the 2016 VAT Act.
