Хуралд оролцох хэлбэр

Хуралд оролцох

Зохион байгуулагчид

Joomla Templates and Joomla Extensions by JoomlaVision.Com

ЭРДЭС БАЯЛАГ ЭРЧИМ ХҮЧНИЙ ЯАМ ЭРДЭС БАЯЛАГ ЭРЧИМ ХҮЧНИЙ ЯАМ

ЭРЧИМ ХҮЧНИЙ ГАЗАР ЭРЧИМ ХҮЧНИЙ ГАЗАР

ЭРЧИМ ХҮЧНИЙ ЗОХИЦУУЛАХ ХОРОО ЭРЧИМ ХҮЧНИЙ ЗОХИЦУУЛАХ ХОРОО

ТӨРИЙН ӨМИЙН ХОРОО ТӨРИЙН ӨМИЙН ХОРОО

ҮНДЭСНИЙ ХӨГЖИЛ ШИНЭТГЭЛИЙН ХОРОО ҮНДЭСНИЙ ХӨГЖИЛ ШИНЭТГЭЛИЙН ХОРОО

Зургийн цомог

Хууль, эрх зүй

Law on Amendment to the Energy Law

Law on Amendment to the Energy Law

Article 1. The following paragraphs and sub-paragraphs shall be added to the Energy Law:

1) Article 2 paragraph 4:

“2.4. If an international treaty to which Mongolia is a party is provides otherwise, the provisions of the international treaty shall prevail.”

2) Article 5 paragraph 1 sub-paragraph 4 and 5:

“5.1.4. To establish security reserves and financial resources and approve the list of reserves;

5.1.5. To draft development papers, strategical documents and standards on energy matters and approve rules on financing expenditures related to energy resources balance counting in national level.”

3) Article 6 paragraph 1 sub-paragraph 8-11:

“6.1.8. to collect statistic datas on energy consumption and generation, to count energy balance in national level, to approve and develop norms and standards;

6.1.9. to approve and implement energy resources evaluation rules jointly with other relevant authorities.

6.1.10 to develop human resource policy of  energy sector;

6.1.11 to determine the starting date and closing date of heating season.”

4) Article 7 paragraph 3:

“7.3. It shall be taken some measures to evacuate buildings, constructions and folks and clear trees, bushes and bushwoods from the network safety zone within the territory concerned and prevent these violations.”   

5) Article 9 paragraph 1 sub-paragraph 14-19:

“9.1.14. to approve tariff determination methodology for fuels used for energy generation and revise the calculation;

9.1.15. to review investment plan stipulated in Article 25 (1) (9) of this Law and resolve issues related to the reimbursement of investment by using tariff regulations;     

9.1.16 to approve rules indexing energy price and tariff;

9.1.17 in order to ease pressure laid on consumers in a proper level, to submit a proposal to the Government to grant subsidy from the State Budget to the licensees who may suffer loss from energy price and tariff;

9.1.18 to approve service fees and charges related to energy;

9.1.19 to approve the budget of the Regulatory Commission and acquiant the licensees with its reports and budget execution.”

6) Article 10 paragraph 2:

“10.2. It shall manage the commercial activities of main network.”

7) Article 12 paragraph 6:

“12.6. Licenses for distribution and supply of regulated electricity and heat shall not be granted to the legal entity that connects lines for its own technological necessity and consumer’s lines connected to substations.”

8) Article 17 paragraph 3:

“17.3. A license holder for the regulated supply of electricity, may transfer its right to sell electricity to some consumers within its territory stipulated in the license to individuals and legal entity under a contract. Contractual retailers shall negotiate on selling price and deductible tax. Electricity shall be sold to the consumers in accordance with the price determined by the Energy Regulatroy Commission.”       

9) Article 27 paragraph 7:

“27.7 The amount and price of fuel supplied for electricity and heat generation may been regulated by a long-term and permanent agreement.”

Article 2. After “develop” in Article 61 (1)(3) it shall be added “… or organize” and after “provide” in Aricle 9 (1)(12), “appoint and remove the members in consultation with the Governors of aimags and capital city”.     

Article 3. The following articles, paragraphs and sub-paragraphs of Energy Law shall be amended as follows:

“Article 3. Definitions

3.1 The following terms used in this Law shall have the following meaning:

3.1.1 “Energy” means energy resources and electricity or heat generated for consumers by using those energy resources;

3.1.2 “energy resources” means all types of fuel, renewable energy or other resources designed for the generation of electricity and heat;

3.1.3 “fuel” means all types of coal, slate, fuel oil (mazut), oil, uranium and thorium ore, their supplementary products and concentration, biomasses existing in nature, and other organic materials, gas;

3.1.4 “power plant” means facilities generating electricity and heat for consumers by using electricity resources;

3.1.5 “main network” means power plants, as well as transmission and distribution networks connected to each other that supply energy to two or more aimag centers;

3.1.6 “main network rules” mean rules regulating technical operations of components of main networks;

3.1.7 “Electricity transmission network” means high voltage power lines and substations of 110 kV and higher for transmission of electricity, as well as other power lines and substations that are connected to the network or technically and technologically required to be a part of this network;

3.1.8 “Electricity distribution network” means power lines and substations either directly connected to the power plant or coming from substations of electricity transmission network to the consumer equipment;

3.1.9 “Energy facilities” means power plants, transmission and distribution power lines and substations and other technological facilities;

3.1.10 Construction of electric facilities” means construction of power plants, transmission and distribution power lines and substations; technical renovation, rehabilitation, repair and extension of basic technological equipment by eligible entities;

3.1.11 Central heating supply” means either supply from power plants generating both heat and electricity or only heat designed for dispatching; or supply over 50 percent of whole community need via networks;         

3.1.12 “Central heating supply rules” means rules regulating technical operation of components of the central heating supply;

3.1.13 “Heat transmission network” means heating lines and equipment from power plants to heat distribution centers;

3.1.14 “Heat distribution network” means heat distribution centers and heating lines and equipment from heat distribution centers to consumer;

3.1.15 “Heating season” means a period of time in the year determined on the average climate indicators of many years during which time it is necessary to provide heat to buildings and premises in order to ensure comfortable living and working conditions;

3.1.16 “Energy supplier” means a legal entity which holds a license for the supply of regulated or unregulated energy;

3.1.17 “Regulated supply of energy” means selling energy to consumers in accordance with tariff (hereinafter referred to as “regulated tariff”) approved and published by the Energy Regulatory Commission stipulated in Article 8 of this law;

3.1.18 “Unregulated supply of energy” means selling energy to consumers in accordance with tariff specified in a contract;

3.1.19 “Consumer” means an individual or legal entity, a party holding right to purchase energy under energy supply contract;

3.1.20 “Consumer classification” means to classify consumers depending on the terms of energy supply contract, quantity and time of energy consumption;

3.1.21 “Business Rules” mean rules regulating the terms of contract between supplier and consumer, as well as requirements, the level and quality of service, payment and relations between licensees;

3.1.22 “Tariff” means price offered by the producer, charge for dispatching, transmission, distribution and supply services, imported energy price, bills for consumer or prices containing one of the prices aforementioned that are approved and published by the Energy Regulatory Commission;

3.1.23 “nuclear energy resources” mean nuclear fuel designed for nuclear energy generation in the power plants;

3.1.24 “nuclear power” means power generated for consumer’s need by using nuclear energy resources;

3.1.25 “nuclear power plant” means facilities generating power for consumers by using nuclear power resources;

3.1.26 “dispatching” means the activities of a dispartching license holder, in particular planning and managing daily operation of main network by balancing generation of both electricity and heat with usage.

3.1.27 “indexation” means to determine energy price and tariff laid on consumers by taking into account real flactuation of costs allocated for energy generation, transmission, distribution, supply processes.    

3.1.28 “Security reserve” means fuel, oil and equipments necessarily reserved to decrease the damage of sudden and natural disaster (force majeure) and maintain the safety of energy generation and usage;

3.1.29 “Classification of consumers” means to classify consumers to determine consumer’s tariff depending on the nature of usage and expenses of energy supply.” 

2) Article 6 paragraph 2:

“6.2 A Cabinet Member in charge of energy matters shall appoint or remove the directors of state-owned enterprises and enterprises with predominant state property in consultation with other responsible authority.”

3) Article 8:

Article 8. Energy Regulatory Commission

 

8.1 The Energy Regulatory Commission (hereinafter referred to as “the Regulatory Commission”) shall govern energy generation, transmission, distribution, dispatching and supply processes.

 

8.2. The Regulatory Commission shall be governed by five Coordinators – three full-time and two non-vacant Coordinators.

 

8.3. The Prime Minister shall appoint a Chairman and two full-time Coordinators of the Regulatory Commission on the basis of the proposal of the Cabinet Member in charge of energy matters; and two non-vacant Coordinators on the basis of the proposals Trade and Industry Chamber and Association for the Protection of Consumer’s Interest. The Prime Minister shall appoint them initially for 2, 4, and 6 years, respectively, and thereafter for 3 years, so that expiration of their terms of service has 2 year-intervals. The terms of service may be extended once.

 

8.4. The coordinators shall have a status of state energy inspectors.

 

8.5. It could establish non-vacant, advisory board under the Regulatory Commission comprised of representatives of equal numbers of consumers and licensees.

 

8.6. The Regulatory Commission shall finance itself by taking licensing fees and charges for regulatory services provided to licensees.

 

8.7. The Regulatory Commission shall have its financial reports audited and published annually.    

 

8.8 The Regulatory Commission shall have the Secretariat governed by a Director who shall be appointed or removed by the Regulatory Commission.

 

8.9 The charter of the Secretariat shall be approved by the Regulatory Commission.”

 

4) Article 9 paragraph 1 sub paragraph 4:

 

“9.1.4. to develop tariff determination methodology, define tariff structure; to review and approve tariffs determined by licensees, to approve the selling price and carry out indexing;”

 

5) Article 9 paragraph 1 sub paragraph 13:

 

“9.1.13 to approve rules regulating financial, technical issues of the connection process of licensees and consumers to the electricity and heat transmission, distribution networks; or in the connection process of other consumers to the networks for the purpose of electricity and heat supply or purchase;”    

 

6) Article 10 paragraph 1:

 

“10.1 The National Dispatching Center shall be a license holder for energy dispatching service.”

 

7) Article 11 paragraph 2:

 

“11.2 The Regulatory Boards of aimags and capital city shall consist of three members. One of the members shall be on full-time basis. The Regulatory Commission shall approve the charters of the Regulatory Boards and procedures for the appointment of member.”

 

8) Article 11 paragraph 3 sub paragraph 3:

 

“11.3.3 to approve, revise and publish tariffs determined by licensees and selling price under its territory and in accordance with methodology and procedures approved by the Regulatory Board.”

 

9) Article 15 paragraph 2 sub paragraph 6:

 

“15.2.6 to develop and implement main network rules in consultation with other licensees.”

 

10) Article 16 paragraph 3 sub paragraph 7:

 

“16.3.7 to conclude a contract stipulated in Article 17 (3) of this Law on basis of negotiation with a consumer that meets requirements set in connection with the instructions stated in Article 9 (1) (13) of this Law; and to connect other consumers to that consumer’s line.”

 

11) Article 17 paragraph 2 sub paragraph 4:

 

“17.2.4 to follow business rules.”

 

12) Article 19 paragraph 3:

 

“19.3 The State Central Administrative Authority in charge of energy matters shall approve the amount of energy imported or exported by a license holder for importation and exportation of electricity.”

 

13) Article 25 paragraph 1 sub paragraph 5:

 

“25.1.5 to generate, transmit, distribute, supply electricity and heat in accordance with main network, central heating supply rules.”

 

14) Article 26 paragraph 2 sub paragraph 8:

 

“26.2.8 tariff should be profitable, reaching certain level determined by calculating the profitability of the costs and amount of investments required for the operation stipulated in the license;”    

 

15) Article 26 paragraph 4:

 

“26.4 The Regulatory Commission shall develop tariff determination methodology and procedures designed to review and examine proposals related to the determination of tariff.”

 

16) Article27 paragraph 1:

 

“27.1 The Regulatory Commission and the Regulatory Boards of aimags and capital city shall annually review the condition of service and tariff; if a licensee request so, review shall be carried out once in a month.

 

Article 4. The following amendments shall be made to the provisions of this Law: “the Regulatory Authority” in Article 5 (1) (2) shall be amended as “the Regulatory Commission”; “the Regulatory Authority” in the title of Article 9, 9 (1), 9 (2), 12 (2), 12 (3)8 21 (1), 21 (3) as “the Regulatory Commission”; “of the Regulatory Authority” in Article 9 (1) (14) as “of the Regulatory Commission”; “by the Regulatory Authority” in Article 13 (2) as “by the Regulatory Commission”; “from the Regulatory Authority” in Article 15 (2) (3), 18 (1) as “from the Regulatory Commission”; “grantors” in Article 24 (2) as “holders”; “rating” in Article 26 (2) (2) as “classification”; and “9.1.14” as “9.1.20”.      

 

Article 5. Article 6 (1) (3), 6 (1) (7), 10 (1) (1), 10 (1) (2), 10 (1) (3) of this Law shall be annulled.

Сүүлд шинэчлэгдсэн: 2012 оны 4-р сарын 03, Мягмар гариг, 15:34
 

Law of Mongolia on Energy

LAW OF MONGOLIA ON ENERGY

CHAPTER ONE GENERAL PROVISIONS

Article 1. The Purpose of the Law

 

1.1. The purpose of this law is to regulate matters relating to energy generation, transmission, distribution, dispatching and supply activities, construction of energy facilities and energy consumption that involve utilisation of energy resources.

Article 2. Legislation on Energy

 

2.1. Legislation on energy shall consist of this law and other legal acts adopted in conformity with this law.

Article 3. Definitions

 

3.1. In this law, the following terms shall have the following meanings:

3.1.1. Business Rules means standards that reflect terms and conditions of contracts between suppliers and consumers, including terms of level and quality of service, payments, and standards governing relations between licensees;

3.1.2. Heat transmission network means heating lines and equipment from power plants to heat distribution centers;

3.1.3. Heat distribution network means heat distribution centers and heating lines and equipment from heat distribution centers to consumer equipment;

3.1.4. Regulated supply of energy means selling energy to consumers at tariffs approved by the Energy Regulatory Authority (hereinafter, Regulatory Authority) specified in article 8 of this law and published (hereafter, regulated tariffs);

 

3.1.5. Unregulated supply of energy means selling energy to consumers at contract prices;

3.1.6. Main network means power plants, as well as transmission and distribution networks connected to each other that supply energy to two or more aimag centers;

3.1.7. Main network code means legal standards that regulate technical activities of components of the main network;

3.1.8. Tariffs means prices approved by the Regulatory Authority and published. These may include any one or all of the following: producer prices, charges for dispatching, transmission, distribution and supply, as well as import prices;

 

Download full version

Сүүлд шинэчлэгдсэн: 2012 оны 3-р сарын 27, Мягмар гариг, 15:22
 

Law of Mongolia on Renewable Energy

LAW OF MONGOLIA

ON RENEWABLE ENERGY

CHAPTER ONE

GENERAL PROVISIONS

Article 1. The Purpose of the law

1.1. The purpose of this law is to regulate relations concerning generation and use of energy utilizing renewable energy sources.

Article 2. Legislation on renewable energy

2.1. Legislation on renewable energy shall consist of the Energy Law, this law and other legislative acts adopted in conformity with these laws.
2.2. If an International Treaties to which Mongolia is a party provides otherwise the provision of the international treaty shall prevail.

 

Article 3 . Application of the law

3.1. This law applies to legal entities, which buy and/or sell electricity and/or heat generated by using renewable energy sources within the territory of Mongolia . Unless otherwise stated in laws, this law shall not apply to renewable energy power sources, which are designed for consumer′s own use only.
3.2.
Article 4. Definitions
4.1. In this law, the following terms shall have the following meanings:
4.1.1. Renewable energy sources" means natural restorable renewable sources such as solar, wind, hydropower, geothermal and biomass;
4.1.2. Biomass" means plant and organic waste;
4.1.3. Renewable energy power source" means a facility, which converts renewable energy sources stated in Article 4.1.1 of the law into electricity and heat;
4.1.4 Renewable energy" means energy produced by using facility stated in 4.1.3 of the law;
.
4.1.5. Independent renewable energy power source" / hereinafter called

“independent power source" / means hybrid and/or non-hybrid renewable energy power sources not connected to the Grid;

4.1.6. Generator" means a legal entity which holds a license for generating electricity and/or heat as stipulated in provision 13.1 of the Energy Law;
4.1.7. Transmission licensee" means a legal entity, which holds a license for transmission of electricity and heat as stipulated in provision 14.1 of the Energy Law;
4.1.8 Consumer" means a natural or a legal person as stipulated in provision 3.1.13 of the Energy Law;
.

CHAPTER TWO

FULL POWERS OF STATE AUTHORITIES WITH REGARD TO RENEWABLE ENERGY

Article 5. Full Powers of State Authorities with regard to renewable energy

5.1. The State Great Hural shall approve strategy documents for promoting a renewable energy sector, and make a decision on transferring an independent renewable energy power source accomplished using the state budgetary funds into local properties.
5.2. The Cabinet shall organize implementation of laws and legislation on renewable energy promotion, and approve a list of soums to be supplied with electricity and heat generated by an independent renewable energy power source.
5.3. The State Administrative Authority in charge of energy shall exercise the following full powers:
5.3.1. To develop and implement strategy documents for promoting a renewable energy sector,
5.3.2. to carry out feasibility studies for constructing renewable energy power sources to be financed by public investment funds,
5.3.3. To develop and have approved the renewable energy equipment safety, operation and maintenance standards in compliance with relevant procedures, and
5.3.4. To develop a policy on renewable energy human resources, to organize implementation of this policy in collaboration with the State Central Administrative Authority in charge of education
5.3.5 To develop and have approved regulation on implementation of Renewable Energy
Law
.
5.4. The Governors of Aimags, the Capital City , Soums and Districts shall exercise the following full powers:
5.4.1. To incorporate sites for constructing independent renewable energy power sources in land development plans of respective aimags and soums,
5.4.2. To make a decision on providing land for possession and use in compliance with procedures stipulated in laws,
5.4.3. To advertise importance of using renewable energy power sources to entities, institutions and residents, and
5.4.4. To lease locally owned independent renewable energy power sources to an entity or an individual
5.5. The Energy Regulatory Authority shall exercise the following full powers:
5.5.1. To approve a model agreement to be concluded between a generator and a transmitter and to monitor implementation of the agreements

CHAPTER THREE

LICENSE

Article 6. Construction of a Renewable Energy Power Source

6.1. A license for construction of energy facilities stipulated in Article 20 of the Energy
Law shall grant to a legal entity the right to construct a renewable energy power source,
6.2. A holder of a license stated in Article 6.1 may have a license for generation.

Article 7. License for Generation of Renewable Energy

7.1. A license for generation of electricity and heat stated in provision 13.1 of the
Energy Law shall grant the right to generate electricity and heat using a renewable energy
7.2. A generator of renewable energy to be connected to the Grid shall have the following rights and duties:
7.2.1. To deliver its electricity to the nearest connection point of a transmission licensee,
7.2.2. To be responsible for transmission cost till the connection point, and
7.2.3. To implement dispatching regulations requested by the dispatching licensee.
7.3. A generator of renewable energy using an independent renewable energy power source shall have the following rights and duties:
7.3.1 үTo deliver its produced electricity to local networks using a calibrated meter, and
.
7.3.2. To be compensated for a difference between end-user tariff approved by the regulatory boards of aimags and the capital city and cost from the Renewable Energy Fund.
7.4. Provision 7.3.2 of this law shall not apply to a generator of renewable energy, a power source of which is constructed using public investment funds.
7.5. A generator of renewable energy using an independent renewable energy power source shall be a holder of license for regulated supply.
7.6. A generator of renewable energy using an independent renewable energy power source shall be a holder of license for unregulated supply.

Article 8. Rights and Duties of a Transmission Licensee

8.1. A transmission licensee has the rights and duties:
8.1.1. үTo purchase electricity sold by a generator at a price approved by the Energy
Regulatory Authority specified in Article 11 of the law
8.1.2. ҮTo connect a generator to distribution board of a transmission network complying with technical requirements, to finance cost of required capacity expansion.

Article 9. Obtaining a License

9.1. An interested legal entity shall submit an application for a license to the Energy
Regulatory Authority or relevant regulatory boards of aimag and capital city,
9.2. In addition to documents stipulated in provision 21.2, documents meeting the following criteria shall be attached to the application specified in 9.1.of this law
9.2.1. A land possession certificate permitting to locate a renewable energy power source and its certified copy,
9.2.2. A plan for disposing or reprocessing accumulators of renewable energy power sources being completely used or expired its useful life,
9.2.3. Studies on soil, flora, geological and hydro-geological conditions, geographical location, land surface, air pressure, weather, wind regime, and a water study for a construction site of a hydro renewable energy power sources,
9.2.4. A statement issued by an authority on conformity of renewable energy equipment and facilities with international and national standards.
9.3. License terms, its extension, amendment, and renewal of a license, suspension and revocation of a license as well as liabilities to be imposed on a licensee shall be regulated by the Energy Law.

Article 10. Power Purchase/Sale Agreement

10.1. ҮA generator shall conclude a power purchase/sale agreement with a transmission
licensee in compliance with a model approved by the Energy Regulatory Authority,
10.2. A power purchase/sale agreement shall specify electricity capacity and energy to
be purchase/sold, tariff, location of commercial meters and other measuring devices, their
types, model, accuracy, multiplier and serial number, quality indices of electricity to be supplied, payment and settlement conditions, duties of the parties and provisions on canceling the agreement.

CHAPTER FOUR

PRICE AND TARIFF

Article 11. Renewable Energy Tariffs and Prices

11.1. The Energy Regulatory Authority shall set tariffs and prices of energy generated and supplied by renewable energy power source to be connected to a transmission network in the following frame of limitation:
11.1.1.price of electricity generated and supplied by wind power source is USD 0.08-
0.095/kWh
11.1.2.Price of electricity generated and supplied by hydropower station with capacity up to 5000 kW is USD 0.045-0.06/ kWh
11.1.3. Price of electricity generated and supplied by solar power source is USD
0.15-0.18/kWh
11.2. Any price difference of electricity generated by a renewable energy power source, connected to a transmission network, shall be absorbed in selling prices of other generators connected to the transmission network
11.3. Regulatory Boards of Aimags and the Capital City shall set prices and tariffs of energy generated and supplied by Independent renewable energy power source in the following frame of limitation:
11.3.1.Price of electricity generated and supplied by wind power source is USD 0.10-
0.15/kWh
11.3.2. Price of electricity generated and supplied by hydro power station with capacity up to 500 kW is USD 0.08-0.10/kWh
11.3.3. Price of electricity generated and supplied by hydro power station with capacity of 501-2 000 kW is USD 0.05-0.06kWh
11.3.4.Price of electricity generated and supplied by hydro power station with capacity of
2 001-5 000 kW is USD 0.045-0.05kWh
11.3.5. price of electricity generated and supplied by solar power resource is USD
0.2-0.3/kWh
11.4. Regulatory Boards of Aimag and the Capital City shall pursue the following principles in setting prices of renewable energy generated by an independent power source:
11.4.1.Geographical location and stages of local economic and social development and infrastructure services shall be reflected;
11.4.2.Ү Price and tariffs shall be affordable.
11.5. The Energy Regulatory Authority shall set prices and tariffs of energy produced
and supplied by geothermal, biomass, and other renewable energy power sources except stated in 11.1 and 11.2 of this law in conformity to acceptance and influence to society.
Article 12. Duration of application of prices and tariffs
12.1. Prices and tariffs of renewable energy shall be followed consistently for a period of not less than 10 years after coming into force date of this law

CHAPTER FIVE

RENEWABLE ENERGY FUND

Article 13. Renewable energy find
13.1. relation concerning to establish, generate, disburse, and report performance of
renewable energy fund shall be regulated by the law of Special Purpose Fund of
Government

CHAPTER SIX

MISCELLANEOUS

Article 14. Dispute Resolution
14.1. A dispute between generation and transmission licensees as well as between a licensee and a consumer shall be resolved in compliance with the Energy Law.
Article 15. Liabilities to be Imposed for Violation of Legislation on Renewable Energy
15.1. If a breach of legislation on renewable energy does not constitute a criminal offense, a judge or a state inspector on energy supervision shall impose the following
penalties:
15.1.1 Imposition of fines of up to MNT 250,000 on a transmitter for breaching provision
8.1.2 of this law.
.
15.1.2. Imposition of fines of up to MNT 50,000 on officials for breaching provision 7.3.2 of this law, who rejected or delayed compensation payment without justification.
Signature

LAW OF MONGOLIA

Сүүлд шинэчлэгдсэн: 2012 оны 3-р сарын 27, Мягмар гариг, 15:23
 

Law of Mongolia on Tourism

TOURISM LAW OF MONGOLIA

CHAPTER ONE

General Provisions

 Article 1. Purpose of the Law

 1.1. The purpose of this Law is regulate relations between the State, citizen, economic entity and organization with regards to tourism promotion, engagement in tourism activities and provision of tourism services on the territory of Mongolia.

 Article 2. Tourism Legislation

 2.1. Tourism legislation shall comprise Civil Code, Land law, Environmental Protection law, Law on the State Strictly Protected Areas, Tourism Law and other relevant legislation enacted in conformity therewith.

 2.2. Should provisions of international treaties to which Mongolia is a party provide otherwise, provisions of the international treaties shall prevail.

 2.3. Relations arising from engagement in tourism business on the State Strictly Protected Areas shall be coordinated in accordance with law on the State Strictly Protected Areas.

 Article 3. Definitions of the Law

 3.1. In this Law, the terms provided in the following sub–paragraphs shall be understood respectively as laid down in the sub-paragraphs concerned:

 3.1.1. “tourism” shall mean travelling of individuals outside their permanent residence for between one and 183 days for familiarization, relaxation and recuperation, as well religious and business purposes;

 3.1.2. “tourism organization” shall mean a profit-making legal unit engaged in the provision, the promotion, the sale and the purchase of tourism products, and the organizing of complex and individual tourism services;

 3.1.3. “tourism region” shall mean an area with historical, cultural and natural resources compatible for tourism development in Mongolia;

 3.1.4 “tourism product” shall mean a service rendered, with remuneration, by tourism organizations to provide tourists travel conveniences and to induce the interests there of;

3.1.5. “tourist” shall mean a Mongolian citizen, foreign citizen or a stateless person travelling for tourism purposes;

3.1.6. “tourist service organization” shall mean an entity rendering hotel, tourist camp, dining, relaxation and recuperation, transportation, communications or leisure services to tourists;

 3.1.7. “guide-interpreter” means an individual accompany to guide and to provide interpretation and explanation to tourists according to the tour program. /This subparagraph was amended by the Law of November 30, 2001./

 3.1.8. “high level hotel” means a service entity which fulfilled obligations required for up keeping of complex hotel services leveled with 3 stars and up. /This subparagraph was added by the Law of November 30, 2001./

 

 

CHAPTER TWO

Tourism Organization

 Article 4. Tourism organization and its classification

 4.1 The tourism organization shall perform the following activities:

 4.1.1. to plan, provide, promote and carry out the whole and the retail sales of tourism products and services, and organize tours;

4.1.2. to compile visa application and travel related documents;

4.1.3. to book, sell and purchase air, railroad and other transportation tickets;

4.1.4. to make hotel, tourist camp, accommodation and leisure reservations;

4.1.5. to make tourist arrival, service and departure arrangements.

4.2. The tourism organization shall be classified into the tour operator and the tour agency;

 4.2.1. the tour operator shall perform activities provided in sub-paragraphs 4.1.1- 4.1.5 of this Article;

4.2.2. the tour agency shall perform all or part of the activities mentioned in subparagraphs 4.1.2. - 4.1.5. of this Article, as well as the intermediate sale and purchase of the tour operator’s products.

Article 5. Special license for up keeping /running of high class hotel services

 5.1. The special license for up keeping of high level hotel services shall be issued by the State central administration in charge of tourism. /This subparagraph was amended by the Law of January 27, 2005./

 

5.2. The applicant for keeping of high level hotel services shall submit besides the documents listed in the article 11, paragraph 1 of the Law on special license for business activities following documentation:

 

5.2.1. the master construction plan of the high level hotel, drawings on technical, technological system scaled 1:100 and 1:200 and the conclusion of the belonging organization for control;

5.2.2. the conclusion of the expert on the standard of the hotel building, its classification, grading, technique and technology;

5.2.3. the conclusion of the commission for approving of the level of the hotel.

 

5.3. All matters not regulated by this law on the special license for up keeping of the high level hotel services shall comply with the Law on special license for business activities. /This paragraph was amended by the Law of November 30, 2001./

 

/The articles 6-7 were annulled by the Law of November 30, 2001./

 

 

Article 8. Powers of the Tourism organization

 

8.1. The tourism organization shall exercise the following powers:

 

8.1.1. to operate activities in accordance with the provisions of Paragraph 4.2. of this Law;

8.1.2. to promote, sell and purchase, on its behalf, its own tourism products;

8.1.3. to submit to the State Central administration in charge of tourism a report on the tourists received in one particular year in accordance with the approved rules; /This subparagraph was amended by the Law of January 27, 2005./

8.1.4. to furnish tourists with concrete, up-to-date information on Mongolian socio-economy, government structure, history, culture, customs and traditions;

8.1.5. to take necessary measures, in its power, for the protection and preservation of the national properties of high historical, cultural and natural value and report to the relevant organization concerned on violations taken place;

8.1.6. to involve its tourism service staff in certified training courses;

8.1.7. to set prices and tariffs for its tourism products;

8.1.8. to conclude contracts with tourism service organizations.

8.1.9. to offer guide-interpreter services for the tourists; /This subparagraph was added by the Law of November 30, 2001./

8.1.10. to obtain grading from the organizations in charge. /This subparagraph was added by the Law of November 30, 2001./

 

8.2. Endeavor to develop the environmentally-friendly tourism that shall contribute to the socio-economic development of Mongolia, as well as to the health, customs and traditions of local people.

 

 

Article 9. Tourism contract

 

9.1. The tour operator and the tour agency shall conclude a contract in written form for sale and purchase of tourism products.

 

9.2. Relations in relation to providing tour service shall be regulated  by Articles 370-379 of Civil Code, this Law and contract concluded between the tourist organization and tourist. Contract shall include following terms and conditions: /This paragraph was revised by the Law of July 4, 2002./

 

9.2.1. the official names and addresses, the State registration certificate numbers, and the bank account numbers of contracting parties; /This subparagraph was amended by the Law of November 30, 2001./

9.2.2. information on the tourists composition, the tour program and other information related thereto;

9.2.3. its tourism products quality, price and payment rules;

9.2.4. the travel duration, the tourists arrival and departure regulations, the powers and duties of the parties;

9.2.5. the rules for the settlement of tourists complaints and disputes regarding the services rendered.

 

9.3. The fulfillment of the tourism contract’s duties and the decisions to cancel, amend or invalidate the tourism contract shall be performed in conformity with the relevant provisions of the Civil Code.

 

 

Article 10. Tourist service organization

 

10.1. The tourist service organization shall comply with the following provisions:

 

10.1.1. to operate its activities in accordance with the provisions set for the services of particular standards and grades;

10.1.2. to set its service prices and tariffs in conformity with the grade conferred and display them openly;

10.1.3. to announce its public contract’s provisions not less than three /3/ months prior to the beginning of the following calendar year;

10.1.4. to display openly organization’s name, grade conferred and license for rendering tourists services;

10.1.5. to render tourist services in accordance with a contract, concluded with tourism organization concerned and avoid double charging tourists for services rendered ;

 

10.2. The State central administrative organ in charge of tourism matters shall approve the rules for grading of high level hotels and tourist camps. /This paragraph was amended by the Law of November 30, 2001./

 

10.3. The tourist service organization shall be prohibited to engage in the activities provided in Paragraph 4.1. of this Law.

 

 

Article 11. The State endorsement of tourism

 

11.1. Support and depreciation allowances provided by the State to export related enterprises shall be similarly applied to services rendered, by tourism organizations and hotels, to foreign

tourists.

 

11.2. The issues regarding the taxation concessions for the citizens or the legal unit, who have made investments in the tourism sector, shall be coordinated in accordance with the relevant tax legislation.

 

11.3. Any person, whose proposal has won the contest announced for the development of tourism region, stipulated in Sub-paragraph 14.1.1. of this Law, may be granted, on a contractual basis, a relevant financial assistance by the State for the implementation of his/ her project.

 

 

 

CHAPTER THREE

Guide-interpreter

 

 

Article 12. Requirements applied to the guide-interpreter

 

12.1. Any person who shall meet with the following requirements may render guide-interpreter business:

 

12.1.1. must be a Mongolian citizen;

12.1.2. must possess the knowledge of the one or more foreign languages, hold the certificate of guide-interpreter training course and obtain grading, classification of the guide-interpreter from the organizations in charge; /This subparagraph was amended by the Law of November 30, 2001./

12.1.3. must meet health requirements necessary for rendering guide-interpreter business.

 

12.2. The State administration in charge of tourism shall issue the grading and classification of the guide-interpreter of person, who shall meet with the requirements listed under Paragraph 12.1. of this Law. /This paragraph was amended by the Law of November 30, 2001./

 

/The paragraphs 12.3; 12.4; 12.5 were annulled by the law of November 30, 2001./

 

 

Article 13. Powers and duties of the guide-interpreter

 

13.1. The guide-interpreter shall exercise the following powers and duties:

 

13.1.1. to render services to tourists in accordance with the program approved by tourism organization concerned and ensure tourists safety;

13.1.2. to wear openly a badge with indication of his/her name and name of tourism organization concerned, while rendering services to tourists;

13.1.3. to furnish tourists with concrete, up-to-date information on Mongolian socio-economy, government structure, history, culture, nature, people’s customs and traditions and avoid divulging confidential information of the State, the natural person or the organization concerned;

13.1.4 to eliminate the damages caused in the course of rendering services due to his / her fault to the tourists or the tourism organization concerned.

 

13.2. The guide-interpreter shall be prohibited to demand rewards from tourists, engage in tourism organization’s functions. /This paragraph was revised by the Law of November 30, 2001./

 

 

 

CHAPTER FOUR

Powers of the State organs with regards to tourism

 

 

Article 14. Powers of the Government with regards to tourism

 

14.1. The Government shall exercise the following powers with regards to tourism:

 

14.1.1. to allocate regions for tourism development in Mongolia in conformity with the State policy on socio – economic development;

14.1.2. to implement the State integrated policy regarding tourism and ensure the

implementation of the relevant legislation;

14.1.3. to approve the national program on tourism development;

14.1.4. to approve the rules regarding to concentration, the expenditure and the

supervision of the assets of the Tourism fund, which is stipulated in Article 19 of this Law, in accordance with the relevant legislation, and appoint a representative of the fund.  /This subparagraph was annulled by the Law of June 29, 2006./

14.1.5. to support domestic and international investments in the tourism sector and establish constructive relations;

14.1.6. to set up State administration in charge of tourism and approve the rules thereof; /This subparagraph was annulled by the Law of June 29, 2006./

14.1.7. to implement the supervision of the fulfillment of the tourism legislation and approve the rules of the State supervision over tourism.

 

 

Article 15. Structure of State administration in charge of tourism

 

15.1. The Structure of the State administration in charge of tourism shall be composed of the State central administrative organ in charge of tourism matters, the Tourism council under the Prime Minister’s office and the local tourism unit (an official) respectively. /This subparagraph was amended by the Law of January 27, 2005./

 

15.2. The Tourism council / hereinafter referred to as the “Council” / shall render advice, draw conclusions deliver opinions to the Prime Minister in regard to the elaboration and the implementation of the State integrated policy on tourism.

 

15.3. The Council shall comprise the chairperson, one (1) member proposed separately by the State central administrative organs in charge of the State finance, the budget, the infrastructure and the environmental matters, and three (3) tourism organization members, proposed by a non- governmental tourism organization respectively. /This subparagraph was amended by the Law of January 27, 2005./

 

15.4. The Council’s chairperson and members shall be appointed by the Prime Minister.

 

15.5. The Council’s chairperson shall be the cabinet member of Government in charge of tourism issue. /This subparagraph was amended by the Law of January 27, 2005./

 

15.6. The Council’s function rules shall be approved by the Government.

 

15.7. The Governor of all divisions may, taking into consideration the demand for tourism development, designate the unit / an official /to be in charge of tourism matters.

 

 

Article 16. Powers of State central administrative organ in charge of tourism matters

 

16.1. The State central administrative organ in charge of tourism matters shall exercise the following powers with regards to tourism:

 

16.1.1. to elaborate and coordinate the State integrated policy regarding tourism, and provide with professional management;

16.1.2. to supervise the fulfillment of tourism legislation; /This subparagraph was annulled by the Law of July 108 2002./

16.1.3. to elaborate tourism development plan and ensure implementation thereof;

16.1.4. to coordinate relations between tourism organizations domestically and internationally;

16.1.5. to plan human resources development in tourism sector and approve training structure and programs thereof association with authorized organs;

16.1.6. to approve rules for grading and licensing of tourism organizations, high level hotels and tourist camps and approve regulation on grading and classifying the guide-interpreter; /This subparagraph was revised by the Law of November 30, 2001./

16.1.7. to determine the number and location of tourist camps, relaxation and

recuperation centers and sanatoriums to operate in the tourism region and book keeping. /This subparagraph was amended by the Law of November 30, 2001/

16.1.8. to resolve the issues of developing tourism infrastructure and financing the advertising activities of Mongolia both abroad and in-country. /This subparagraph was added by the Law of June 29, 2006./;

16.1.9. to advertise Mongolia both abroad and in-country; /This subparagraph was added by the Law of January 27, 2005 and the numbering was amended by the Law of June 29, 2006./;

16.1.10. to issue special license for running high level hotel; /This subparagraph was added by the Law of January 27, 2005 and the numbering was amended by the Law of June 29, 2006./;

16.1.11. to sum up the tourism statistic information and to make analyses and research /This subparagraph was added by the Law of January 27, 2005 and the numbering was amended by the Law of June 29, 2006./;

16.1.12. to establish unified tourism information network and database /This subparagraph was added by the Law of January 27, 2005/;

16.1.13. to determine the number of tourists to be received in tourism region /This subparagraph was added by the Law of January 27, 2005 and the numbering was amended by the Law of June 29, 2006./;

16.1.14. to define the roads and routines for tourism /This subparagraph was added by the Law of January 27, 2005 and the numbering was amended by the Law of June 29, 2006./;

16.1.15. to prohibit conducting of any activities which may negatively influence the development of tourism /This subparagraph was added by the Law of January 27, 2005 and the numbering was amended by the Law of June 29, 2006./

 

16.2. The activities specified in article 16.1.8 of this Law may be financed by foreign country, international organization, as well as through the donation, aid and other sources of business entities, organizations and individuals, which are not prohibited by law. /This subparagraph was added by the Law of June 29, 2006./

 

 

Article 17. Powers of State administration in charge of tourism

 

17.1. The State administration in charge of tourism shall exercise the following powers with regards to tourism:

 

17.1.1. to promote Mongolia domestically and internationally;

17.1.2. to issue the special license for up keeping of high level hotel services; /This subparagraph was re-edited by the Law of November 30, 2001/

17.1.3. to consolidate and analyze tourism statistical data;

17.1.4. to set up the integrated tourism information network and the database;

17.1.5. to determine the number of tourists to be received in tourism region;

17.1.6. to determine tourism routes and itineraries;

17.1.7. to ban conduct of any activity that might negatively affect tourism development.

 

/This Article was annulled by the law of January 27, 2005./

 

 

Article 18. Power of the Citizen’s Representatives Meeting of all divisions and the Governor with regards to tourism

 

18.1. The Citizen’s Representatives Meeting of the capital city, aimag, soum and district shall exercise the following powers with regards to tourism:

 

18.1.1. to supervise on its respective territories the implementation of the State policy and legislation regarding tourism, and, if deemed necessary, deliberate the Governor’s report on this matter;

18.1.2. to ensure the implementation of the national program on tourism development;

18.1.3. to submit to the State central administrative organ in charge of tourism matters proposals regarding the involvement of particular parts of its respective territories in the tourism resource region;

18.1.4. to approve programs regarding the tourism development on its respective territories.

 

18.2. The Governors of capital city, aimag, soum and district shall exercise the following

powers with regards to tourism:

 

18.2.1. to implement on its respective territories the State integrated policy regarding tourism, and ensure and coordinate the fulfillment of tourism legislation;

 

18.2.2. to issue, within his/her power and in accordance with number and location approved by the State central administrative organ in charge tourism matters and relevant legislations, the license for land ownership by tourist service organization to be set up on the territory concerned and conclude a contract;

18.2.3. to elaborate programs and projects in conformity with the policy on regional development of tourism on its respective territories and submit proposals in this regard to the relevant Citizen’s Representatives Meeting and elaborate and implement a tourism development plan in accordance with approved program;

18.2.4. to avoid charging or receiving any payments/duties, unless prescribed by

law, from tourists transiting through the respective territories.

 

 

 

CHAPTER FIVE

 

Tourism fund

 

Article 19. Tourism Fund

 

19.1. The tourism fund shall be set up for the purposes of financing expenses necessary for the infrastructure development, the domestic and the international promotion of Mongolia, the elimination of possible negative tourism impacts on the environment, the restoration of cultural properties, and the protection and the cultivation of historical, cultural and natural heritage.

19.2. The tourism fund shall be a component part of the State central budget.

 

Article 20. Tourism fund’s sources

 

20.1. The tourism fund shall be formed from the following sources:

20.1.1. capital allocated from the State central budget in one particular year;

20.1.2. assistance and charity by native and foreign citizens and organizations;

20.1.3. other legitimate sources.

 

Article 21. Purpose of the Tourism Fund

 

21.1. The tourism fund’s resources shall be spent for the purposes as provided in Paragraph 19.1. of this Law.

 

/This chapter was annulled by the Law of June 29, 2006./

 

 

 

CHAPTER SIX

The Supervision of tourism activities and the Liability

 

 

Article 22. The supervision of tourism activities

 

22.1. The State and the professional supervision shall be provided for the fulfillment of tourism legislation.

 

22.2. The State supervision of tourism legislation’s implementation shall be administered, within their power, by the State central administrative organs and the Governors of all divisions. /This subparagraph was amended by the Law of January 27, 2005./

 

22.3. The professional supervision of tourism legislation’s fulfillment shall be administered by the State inspection division of Infrastructure.

 

22.4. Matters regarding the appointment and the dismissal of the State Senior and the State tourism supervisors shall be regulated in accordance with the provisions of Article 21 of State Inspection Law.

 

 

Article 23. Powers and duties of the State tourism supervisor

 

23.1. The State tourism supervisor shall exercise the following powers:

 

23.1.1. to examine the state of the tourism legislation’s fulfillment by the tourism organizations, the tourist service organizations and the guide-interpreters regardless of the form of property thereof;

23.1.2. to require free of charge any data and information necessary for inspection purposes from citizens, officers or organizations involved;

23.1.3. to submit, along with the relevant grounds, proposals to the State Central administration in charge of tourism for the invalidation of licenses, provided in Article 5 of this Law; /This subparagraph was amended by the Laws of November 30, 2001 and January 27, 2005./

23.1.4. to have access to relevant organizations concerned for inspection purposes;

23.1.5. to inspect documents of persons in violation of tourism legislation and temporarily confiscate them, if deemed necessary;

23.1.6. to impose administrative penalties on those in violation of tourism legislation as prescribed by this Law;

23.1.7. to submit proposals to the State Central administration in charge of tourism on downgrading hotels failing to comply with the grade standards conferred. /This subparagraph was amended by the Law of January 27, 2005./

 

23.2. The State tourism supervisor shall have the following duties:

 

23.2.1. to strictly abide by the legislation and the regulations adopted in conformity therewith in the course of conducting the supervision of tourism legislation’s fulfillment;

23.2.2. to respect the rights and the legal interests and avoid divulging the confidential information of the organizations and the natural persons concerned, in the course of taking prosecution measures regarding detected violations;

23.2.3. to administer tourist complaints and proposals in reference to the violations of tourism legislation;

23.2.4. to inspect the reliability of information provided to tourists by the tourism organizations or the guide-interpreters on Mongolian socio-economy, government structure, history, culture, people’s customs and traditions.

 

 

Article 24. The Liability for violation of tourism legislation

 

24.1. The Judge and the State tourism supervisor shall, taking into the consideration the nature of the violation and the size of damages caused, impose the following administrative penalties on the persons in violation of tourism legislation, if such violations do not constitute a criminal offense:

 

24.1.1. confiscation of unlawful income and fine of up to Tg 60.000 and up to Tg 250.000 shall be imposed on an official and an organization in violation of Paragraph 10.3. of this Law respectively.

24.1.2. fine of Tg 15.000-50.000 shall be imposed on a guide-interpreter in violation of Paragraph 13.2. of this Law;

24.1.3. fine of up to Tg 50.000 and up to Tg 100.000 shall be imposed on an official and an organization respectively, for failure to comply with the legal requests given by the State tourism supervisor regarding the violations detected in tourism activities;

24.1.4. fine of up to Tg 10.000 and up to Tg 50.000 shall be imposed on an official and an organization respectively, for failure to submit in due time to an authorized organization or official a tourism related information;

24.1.5. fine of up to Tg 50.000 shall be imposed on any person who have charged or received any payments/duties in violation of this Law from tourists transiting through his/ her territory.

24.1.6. fine of up to Tg100.000 and up to Tg 250.000 shall be imposed on

organizations in violation of Paragraph 8.1.6 of this Law. /This subparagraph was added by the Law of November 30, 2001/

 

CHAIRMAN OF PARLIAMENT

 

/In this Law, amendments made by the Law of November 30, 2001, July 4 and 10, 2002, January 2, 2003, January 27, 2005 and June 29, 2006 was included. /

Сүүлд шинэчлэгдсэн: 2012 оны 3-р сарын 27, Мягмар гариг, 18:07
 

Law of Mongolia on Value-Added Tax


LAW ON VALUE-ADDED TAX

CHAPTER ONE

General provisions

Article 1. The purpose of the Law

1.1. The purpose of this Law is to regulate the relations with respect to the imposition of a value-added tax, the payment of value-added tax to the budget and the back-payment of the value-added tax from the budget.

Article 2. Legislation on value-added tax                                    

 2.1. The legislation on value-added tax (VAT) consists of General Taxation Law[1], this Law and other legislative acts enacted in conformity with the above laws.  

 Article 3. Scope of the Law

                 3.1. This law shall apply when imposing value-added tax on imported and exported goods by citizens and legal entities, as well as goods sold or manufactured, works performed and services rendered in the territory of Mongolia.

                    Articel 4. Definitions of terms

 4.1.Following terms used in this law shall have the following meaning:

                 4.1.1."sales" means transfer of goods into others’ ownership for payment and performance of services for payment;

 4.1.2. "goods" means all types of property other than money capital;

4.1.3. “VAT tax invoice with unified numbering” means primiary book-keeping document of accounting with unified numbers issued by Tax authorities, showing thereon the names, types, quantity of sold goods, performed works and rendered services, their unit and total prices, as well as amount of a value-added tax;

4.1.4. " economic activity" means activities of complete or partial sale of goods, render of service and performance of works for the purpose of profit making as well as for non-profit purposes;

4.1.5. “citizenmeans a citizen of Mongolia, Foreign citizen and stateless person specified in the article 5 of Personal income tax law;

4.1.6.“permanent resident, non-residentmeans definition specified in articles 6, 7 of Personal income tax law;                                                         

 4.1.7."legal entity" means an entity that has been registered in accordance with the article 7 of the Law on state registration of Legal entity[2] and has been issued state registration certificate of legal entity in accordance with article 17.4 of the same Law;

 4.1.8. "services " means any activity other than the sale of goods and monetary transaction;

 4.1.9. " facilities being used for housing purposesmeans building which is completed for the purpose of housing and subject of VAT imposition in accordance with this Law;

 4.1.10. "day being determined as value added tax payer" means first day of the month following the day on which the amount of sale revenues of a citizen or legal entity that is engaged in activities specified in article 3 of this Law, has reached 10.0 million togrogs or over according to the income tax statement of legal entity or citizen’s income and tax sheet ;

 4.1.11. "humanitarian and grant aid goods obtained from foreign governments and non-governmental organizations and international and charity organizations” means grant aid goods received free of charge under international Agreement of Mongolia entered by the Government of Mongolia with Governments of foreign countries and international organizations for the purposes of eliminating losses suffered due to force majeure and other disasters identical to this. 

4.2. Goods, works and services to be purchased on domestic markets using funds granted by Governments of foreign countries and international organizations within the scope of grant and humanitarian aid specified in section 4.1.11 of this article, shall be included into it.

CHAPTER TWO

Value-added taxpayers, their registration, and exclusion from registry

Article 5. Value-added taxpayer

                 5.1. Any citizen and legal person, who is engaged in import and export of goods, as well as sale and manufacturing of any goods, performance of work and rendering of services in the territory of Mongolia, shall be value-added taxpayers.

 5.2. Article 5.1 shall apply to the representative office of the foreign legal entity whose revenue of sold goods, performed works and rendered services in the territory of Mongolia, has reached 10 million togrogs or more.

 5.3. Any citizen permanently or temporarily employed under a labor contract shall not be treated as VAT-taxpayer and pay, salary, remuneration, pension, benefit, bonus and premium provided to him shall not be subject of VAT imposition.

                 Article 6. Registration and de-registration of value-added taxpayer from the registry

 6.1. A person, who has met the requirements specified in article 4.1.10 of this Law, shall submit its application for registration as a value-added taxpayer to the concerned tax authority within 3 business days.  

 6.2. Relevant tax authority, within 2 business days after the receipt of an application from the person specified in article 4.1.10 of this law other than those mentioned in article 7.1.3 and 13 of this law, shall register as a value-added taxpayer and issue the person a certificate. 

 6.3. Certificate format specified in article 6.2 of this Law shall be approved by the Head of the National Taxation Authority.

 

6.4. Any citizen and a legal entity may be registered as value-added taxpayer on the voluntary bases in case they met the following conditions:

 

6.4.1. sale revenue of the primary manufacturing, work and service which shall be the subject of the VAT imposition has reached the 80 percent of the revenues specified in article 4.1.10 of this Law;

 

6.4.2. despite the fact that whether the sale revenue of the primary manufacturing, work and service has reached the amount specified in article 6.4.1 of this Law or not, if an investment which amounted to US$ 2.0 million or more has been made into Mongolia.

 

6.5. Revenues and investments specified in article 6.4 of this Law should be compatible with the income tax statement and income and tax sheet of the citizen and legal entity as of the last single year, as well as that person should have complied with the Law on Accounting[3] and international standard when keeping the basic and other accounting work.

 

6.6. Period specified in articles 6.1 and 6.2 shall equally apply when submitting an application for registration as value-added taxpayer on voluntary bases and during issuance of certificate.

 

6.7. In case 66 or more percent of the assets or voting rights of two or more legal entities are owned by one or several legal entities, they may be registered as one group of value-added taxpayer, however, each legal entities included in this one group shall be value added taxpayer in accordance with this Law.

 

6.8. Permission to be registered as one group as specified in article 6.7 of this Law shall be issued by relevant taxation authority in written.

 

6.9. Any one of the persons registered in accordance with the article 6.7 of this Law shall bear the responsibilities of the value added taxpayer on behalf of such group and deal with relevant taxation authority.

 

6.10. Each persons specified in article 6.7 of this Law shall not be required to make value-added tax calculation and submit tax statement, however, each shall be required to keep accounting record in accordance with Law and responsible for the final liability with regard to issues relevant to him as a value-added taxpayer. 

 

6.11. An individual or legal person which were registered as value added tax payers shall be excluded from taxpayers' registry and their certificate shall be cancelled by respective tax authority if it has been proven by financial statements for a business entity or organization or by income and tax sheet for an individual that their taxable income amount for the subsequent year after being registered as VAT payer is less than 10 million togrog and if taxable income amount for next years will not reach 10 million togrogs.

 

6.12. National taxation authority shall, on a monthly basis, publisize the names of the business entities, organizations or individuals on national scale that were registered as value added tax payers or excluded from the registry through mass media or web page.

 

6.13. Excluding the taxpayer from value-added taxpayers’ registry shall not serve as grounds for not being re-registered as an value-added taxpayer or for releasing him from liabilities under the Law on Value added tax for his previous activities conducted as a value-added taxpayer.

 

 

 

CHAPTER THREE

Goods, jobs and services subject to imposition of a value-added tax

 

 

Article 7. Goods, jobs and services subject to

imposition of a value-added tax

 

7.1. Unless otherwise provided in Law, the value-added tax shall be imposed on the following goods, works and services:

 

                                7.1.1. all types of good sold in the territory of Mongolia;

                7.1.2.all types of goods exported from the territory of Mongolia for sale, use or consumption foreign country;

7.1.3. all types of goods imported from foreign country into the territory of Mongolia for sale, use or consumption;

                7.1.4. works performed and services rendered in the territory of Mongolia.

 

7.2. In case the total sum of performed works or rendered services of foreign legal entity as well as individual those are not located in or resident of the territory of Mongolia exceeds 10.0 million togrogs or is more than this, article 7.1.4 of this law shall equally apply.

 

                7.3. Following activities shall be regarded as “sale of goods”:

 

                                7.3.1. sale of business or certain business rights;

                7.3.2. retaining of any goods by the taxpayer from the business assets when taxpayer ceases his trade, manufacturing, works and services and is excluded from the registry of value-added taxpayer;

                7.3.3. tax deduction on goods in accordance with the article 14 of this law;

                                7.3.4.  closing of any debts through the transfer of goods;

                7.3.5. sale of goods by persons not residing in the territory of Mongolia on the order of Mongolian citizen or legal entity.

 

7.4. Following activities shall be regarded as “rendering of services”:

 

                7.4.1. rendering of services such as electricity, heat, gas, water, sewage, post, communication and other services;

                7.4.2. leasing of goods or granting rights to possess or use in other forms;

7.4.3. renting of accommodation in a hotel or similar establishment or granting of rights to possess or use in other forms;

                7.4.4. renting of premises in a building or construction or granting of rights to possess or use in other forms;

                7.4.5. renting of immoveable or moveable properties other than buildings or constructions, or granting of rights to possess or use in other forms;

7.4.6. transfer, lease and sale of new invention, product design, useful design, copyright work, and trade mark, know-how and other proprietary information;

                7.4.7. issuing of any material and monetary lottery, organizing of paid quiz or gambling game, and providing intermediation service;

7.4.8. closing of debt payments through performing works or rendering services;

7.4.9. performance of works and rendering of services by persons not residing in the territory of Mongolia on the order of Mongolian citizen or legal entity.

7.4.10. pay of interests or fine as a result of misconduct;

7.4.11. tax deduction on works and services in accordance with the article 14 of this law.

 

                7.5. When imposing taxes on goods, works and services specified in article 7.1 of this Law, following conditions must be met:

                               

7.5.1. the person shall be value-added tax payer in accordance with articles 5 and 6 of this Law;

 

7.5.2. sales shall have conducted within the scope of its business activities.

 

7.6. Articles 7.3.5 and 7.4.9 of this Law shall not apply to article 7.5.1 of the same Law.

 

 

 

CHAPTER FOUR

Procedures of imposing value-added tax

 

 

Article 8. Imposing of value-added tax  

 

                8.1. Value-added tax shall be imposed according to following procedures:

 

                8.1.1. each and every time during which the goods, works and services were imported or exported as well as sold;

                8.1.2. on final sale when construction works have been implemented;

                8.1.3. time to time in accordance with the schedule agreed to make lease payment, if financial leasing item was purchased or imported.

 

                8.2. When imposing tax on revenues specified in article 7 of this Law or exempting from such tax in accordance with the article 13 of the same Law, “Sector classification of all types of economic activities” shall be adhered to.

 

                8.3. “Classification” specified in article 8.2 of this Law shall be approved by the Cabinet member in charge of financial matter.

 

 

 Article 9. Taxable amount of value-added tax

 

9.1. Taxable amount of the value-added tax shall be determined by the following procedures:

 

9.1.1. The taxable amount of value-added tax for imported goods shall be determined by adding customs duty, excise and other tax on customs price which was determined in accordance with the Law on Customs tariffs and tax; /This subparagraph was amended by the Law of May 20, 2008./

 

9.1.2. The taxable amount of value-added tax for goods sold or manufactured, works performed and services rendered in the territory of Mongolia shall be based on the current market price or tariffs of goods sold or manufactured, jobs performed and services rendered.

 

9.1.3. The taxable amount of value-added tax for activities specified in articles 7.3.1 and 7.3.2 of this Law shall be based on the current market price or tariffs of the goods, works and services;

 

9.1.4. The taxable amount of value-added tax for citizens and legal entities those are engaged in the service of any material and monetary lottery and paid quiz or gambling game shall be determined by deducting sum of money paid for winning from total sum of money paid by players;

 

9.1.5. The taxable amount, if debt has been satisfied through transfer of goods, performance of works and rendering of services, shall be based on the sum of price.

 

                9.2. In following circumstances, the taxable amount of value-added tax shall be determined by the relevant tax authority based on the current market price or tariffs:

 

                9.2.1. The price or tariff of the sold goods, performed works and rendered service is uncertain;

                                9.2.2. Goods, works and services have been mutually exchanged;

                9.2.3. Entities interdependent from each other sold goods, performed works and rendered services free of charge or at lower or higher market prices or tariffs between them.

 

9.3. Where the taxable amount is expressed in foreign currency, it shall be converted into togrogs using the exchange rate fixed by the Mongol Bank on the day specified in accordance with the clause 10.2 of this Law.

 

 

Article 10. Time of tax imposition

 

10.1. The time of imposition of value-added tax on revenues of citizens and legal entities those registered as value-added tax payer, shall start from the day of issuing certificate by tax authority.

 

10.2. The time of imposition of value-added tax on each time when goods sold, works performed and services rendered shall be determined as taking place at the earliest of the following actions:

 

10.2.1. the day when the seller issues invoice specified in article 4.1.3 of this Law;

10.2.2. the day when the seller receives payment for the sold goods, performed works and rendered services;

10.2.3. the day of purchase of goods, jobs and services.

 

 10.3. In the case of services which are provided continuously, such as the supply of electricity, heat, gas, water, post, communication and other services, the time of imposition of value-added tax shall be the day of issuing an invoice or the day of receiving payment specified in article 4.1.3 of this Law, or whichever takes place earliest.

 

 10.4. The time of imposition of value-added tax on goods specified in article 7.3.2 of this Law, shall be the day of such retention of such goods by the taxpayer.

 

                10.5. The time of imposition of value-added tax on imported goods shall be the day of its declaring to the Customs authority.

 

10.6. Retailer, once a month and wholesaler, every time it makes sale, shall produce invoice specified in 4.1.3 of the Law.

 

 

 

CHAPTER FIVE

Rate of value-added tax

 

 

Article 11. Rate of value-added tax  

 

11.1. Unless otherwise provided in this Law, the value-added tax shall be imposed at the rate of 10 percent of the taxable amount of imported, manufactured or sold goods, performed works and rendered services.

 

11.2. The rate of value-added tax on goods, works and services specified in article 12 of this Law shall be equal to zero / "O"/.

 

                11.3. The rate of value-added tax shall be imposed at 0-10 percent of the taxable amount of imported and manufactured petrolium and dissiel. /This subparagrap was added by the Law of May 22, 2008./

 

11.4. The rate of value-added tax on imported and manufactured petrolium and dissiel shall be determined by the Government within the limit specified in article 11.3 of this law.  /This subparagrap was added by the Law of May 22, 2008./

 

Article 12. Usage of zero tax rating

 

       12.1. The rate of value-added tax imposed on the following exported goods, works and services shall be equal to zero /"0"/:

                               

                12.1.1. goods exported from the territory of Mongolia for the purpose of sale and declared with the customs organization;

 

                12.1.2. passenger and cargo transportation services rendered from the territory of Mongolia to foreign countries, from foreign countries to the territory of Mongolia, as well as from foreign countries to third countries transiting through the territory of Mongolia;

 

                12.1.3. Any services rendered /"including non-taxable services"/ outside the territory of Mongolia;

 

12.1.4. Any rendering of services /including "non-taxable services"/ to a foreign citizen or a legal person, who was outside the territory of Mongolia at the time, the services were rendered;

 

                12.1.5. Any services of air navigation management, technical and fuel services, and cleaning which shall be provided for both foreign and domestic airplanes conducting international flight and sale, food and drink services provided for air crew members or passengers during flight;

 

 12.1.6. State orders, medals and coins manufactured domestically on the order of Government or Bank of Mongolia.

 

12.2. Article 12.1.4 of this Law shall not apply to services, which are rendered in direct connection with movable or immovable property situated in the territory of Mongolia.

 

                12.3. The article 12.1 of this Law shall apply to citizens and legal entities registered as value-added taxpayer and engaged in exporting activities on the bases of contract concluded with foreign citizen and legal entity.

 

           12.4. In following circumstances, citizens and legal entities specified in article 12.1.4 of this Law shall be considered as not-present in the territory of Mongolia:

                                               

12.4.1. have a permanent representative office in his country and no such office in the territory of Mongolia;

 

12.4.2. has not representative office in his country but resides permanently in a country other than Mongolia;

 

12.4.3. have representative offices both in his country and in Mongolia, but the services are wholly or mainly used for the representative office in foreign country.

 

CHAPTER SIX

Exemption from value-added tax

 

 

Article 13 . Exemption from value-added tax

 

13.1. Following goods are exempted from value-added tax:

 

 13.1.1. passengers’ personal use goods with permitted amount to let without tax and approved by customs authority;

 

13.1.2. imported goods for the work needs of diplomatic missions and consular offices, UN and its specialized branches permanently residing in the territory of Mongolia;

 

13.1.3. goods purchased, works done and services rendered in the territory of Mongolia for work needs of diplomatic missions and consular offices residing in the territory of Mongolia, and their employees’ personal use, if such goods, works and services purchased are exempted from tax in respective countries;

 

13.1.4. goods received through humanitarian and grant aid from foreign governments, NGOs and international or humanitarian organizations;

                               

13.1.5. Special purpose appliances, equipments and machinery designed for citizens with learning difficulties;

/This subparagraph was revised by the Law of August 3, 2007./

 

13.1.6. any weapons and special equipments imported for the needs of armed forces, police, and organizations of national security or court order enforcement;

 

13.1.7. civil passenger airplane, its spare parts;

 

13.1.8. revenues from the sale of establishments used for housing and/or their parts;

 

13.1.9. imported machineries, equipments, materials, raw materials, spare parts, petroleum and diesel for the need of exploration, extraction and utilization of fuel conducted according to the product sharing agreement concluded with Government on crude oil industry; 

                13.1.10. blood, blood products, and organs to be used for treatment purposes; 

 

13.1.11. gas fuel, its container, equipments, special purpose machineries, mechanisms, and mechanics;

 

13.1.12. Mongolian monetary notes made abroad by order;

13.1.13. sold gold;

13.1.14. sold newspapers;

13.1.15. Experimental products of research and science work.

/This subparagraph was added by the Law of December 28, 2006./

 

13.2. List of goods under article 13.1.11 of this Law shall be approved by Government.

 

13.3. Article 13.1.3 of this Law shall not apply to one time purchase of goods, works and services valued under ten thousand togrogs.

 

13.4.Article 13.1.6 of this Law shall not apply to the purchase of non-special purpose cars.

 

13.5. Article 13.1.8 of this Law shall not apply to buildings for housing which was newly constructed for the purpose of selling.

 

13.6. Following services are exempted from the value-added tax:

 

13.6.1. currency exchange;

13.6.2. banking services, such as the receipt or transfer of, or any dealing with, money, any security for money or any note or order for the payment of money and the operation of any savings account;

13.6.3. services of insurance, reinsurance and registration of property;

13.6.4. the issuance, transfer or receipt of any securities and shares, and underwriting of such securities;

13.6.5. the making the advance or the granting of credit;

13.6.6. the provision, or transfer of an interest on social and health insurance fund;

13.6.7. any services in respect of fees for bank or financial interest, dividend, credit guarantees or insurance contract;

                13.6.8. the renting service of accommodation for housing and its part;

13.6.9. educational and professional service mentioned in the regulation of the citizen or legal entity that is engaged in and has a special permission to conduct educational and professional training;

13.6.10.medical services;

13.6.11.services of religious organizations;

13.6.12. state services rendered by the Government, budged and other organizations under it;

13.6.13. public transportations service specified in article 3.1.11 of the Law on Auto transportation[4];

                13.6.14. tour operating services such as to receive tourists, planning of the service, its advertising and preparation of relevant documents provided to foreign tourists by legal entity engaged in tour businesses on the bases of a contract  which was concluded with foreign tourist organization.

 

13.7. Persons /other than importers/ engaged in manufacturing, works and servicing with a sales volume of 10 million togrogs or less annually shall be exempted from value-added tax.   

               

                13.8. Article 13.6.10 of this Law shall not apply to manufacturing and selling of drugs, medicines, medical devices and equipments.

 

                13.9. Services specified in article 13.6.14 of this Law shall not include services of tour base, restaurants, transportation of tourists, tour guide and hotel.

 

                13.10. When exercising the exemption specified in article 13.1.3 of this Law  to foreign diplomatic and consular missions, and their employees, the principle of repayment of already paid tax shall be adhered to.

 

13.11. In case goods, works and services were transferred to others for free of charge or used for personal use other than the usage in the internal circulation of manufacturing, then the value-added tax shall not be exempted. 

 

 

 

CHAPTER SEVEN

Deduction and repayment of value-added tax

 

 

                Article 14. Deducting value-added tax

 

       14.1. Following value added taxes paid by an individual or legal entity in conformity with Articles 7, 8 and 11 of this Law after being registered as a taxpayer shall be deducted from value-added tax to be paid to the state budget:

 

14.1.1. taxes paid in connection with the purchased goods, performed works and rendered services for production and services purposes;

 

14.1.2. taxes paid for goods, works and services directly imported by himself for the purpose of selling as well as manufacturing and servicing;

 

14.1.3. by deducting value-added tax paid from the sum amount if goods, works and services were purchased with value-added tax when being registered as value-added tax payer;

 

14.1.4. if citizen and legal entity engaged industry of cattle breeding and farming has prepared or planted himself, and sold meat, milk, egg, hide and crops those have not gone through basic processing to local manufacturers, then it shall be considered that 10 percent value-added tax is included in the price and the value-added tax to be paid by the purchaser of those items shall be deducted in same percentage.

 

14.2. If imported or sold through intermediation by purchasing those basic raw materials specified in article 14.1.4 of this Law, deduction shall not be made from the value-added tax to be paid.

 

14.3. In case the value-added tax paid by purchaser to supplier is not reflected in invoice, bill and other documents of accounting, such tax shall not be deducted.  

 

                14.4. Value-added taxes paid in importing and purchasing following goods, works and services shall not be deducted from the total sum of value-added tax which will be paid by purchaser:

               

14.4.1. passenger car, its parts and spare parts;

 

14.4.2. goods and services purchased for personal and employee’s need;

14.4.3. goods, works and services purchased  or imported for manufacturing or servicing specified in article 13 of this Law.

 

14.5. Article 14.4.1 of this Law shall not apply to value-added taxpaying legal entity which is engaged in selling activities in passenger car, its parts and spare parts as reflected in its contract and regulations.

 

                14.6. In case, the amount of deduction which is to be made in the month as specified in article 14.1 of this Law, exceeds the sum of value-added tax which is to be made in the same period, tax authority shall resolve the issue in a following manner:

 

14.6.1. to include in and transfer to the value-added tax which is to be paid in the following month, quarter and year;

 

14.6.2. to include in and transfer to other types of taxes which is to be paid to state or local budget according to legislation.

 

                14.7. In case, some parts of imported or purchased goods, works and services for manufacturing or servicing purposes were utilized for the need or manufacturing and servicing where value-added tax is to be paid and other parts for the need where there is an exemption from a value-added tax, then the only part which was utilized for the manufacturing and servicing where value-added tax apply shall be deducted.  

 

Article 15. Returning of value-added tax

 

15.1. Value-added tax shall be returned to the taxpayer in following procedures, if paid in extra amount or specifically provided for in Law:

 

15.1.1. taxpayer who paid the value-added tax in extra amount shall make a request to return his extra paid tax in written to relevant tax authority when he prepares tax and submits report;

 

                                15.1.2. Diplomatic representative or consular offices, and their employees shall submit their request to return their value-added taxes paid for goods, works and services purchased from local market for the month, together with relevant documents, to National tax authority by the 10th day of the following month;

 

15.1.3. relevant tax authority shall submit its proposal upon its overview and approval within 15 business days after the receipt of the request specified in article 15.1.1 of this law to National tax authority;

 

15.1.4. National tax authority shall overview the request and proposal received as specified in articles 15.1.2 and 15.1.3 of this Law within 7 business days and determine the amount of taxes to be returned, shall notify taxpayer of this in written, and shall submit to State Central administration in charge of financial matters its proposal showing the name, registration number and bank details of taxpayer, amount of taxes to be returned and sum of loan within 2 business days;

 

15.1.5. State Central administration in charge of financial matters, within 45 days after the receipt of the proposal as specified in article 15.1.4 of this Law, shall return the tax.

 

15.2. Procedures regulating the relations with respect to deduction and returning of value-added tax and reflecting them on accounting shall be approved by the Cabinet member of Government in charge of financial matters.

 

15.3. Value-added tax which is to be returned shall be the part of state budget and shall not exceed 30 percent of the same type of tax which is to be paid into state budget in the same month, quarter and year.

15.4. Person specified in article 6.9 of this Law shall have a right to have value-added tax deduction made and to get the return of its tax paid in extra amount.

 

                15.5. Tax shall be returned from state budget every month, if one has exported its own manufactured products and taxes of other taxpayers shall be returned once a quarter.

 

 

 

CHAPTER EIGHT

Value-added tax payment to budget and preparation of report

 

 

Article 16.  Imposing of value-added tax on goods, works and services, its payment to budget and preparation of report

 

                16.1. A taxpayer shall transfer the value-added tax which is imposed on goods, works and services to consolidated account of state treasury before the 10th day of the following months according to the following procedures and submit the report to relevant tax authority in accordance with approved forms:

 

 16.1.1.Taxpayer, himself, shall pay the tax imposed on sold goods, performed works and rendered services for the month to the budget;

 

16.1.2. Mongolian citizen and legal entity, when purchasing goods, works and services specified in articles 7.3.5 and 7.4.9 of this Law from the persons non-resident or not residing in the territory of Mongolia,  shall charge the value-added tax on the price of such goods, works and services and pay to the budget;

 

                16.1.3. Value-added taxes imposed on goods, works and services which shall be considered as satisfaction of debts as specified in articles 7.3.4 and 7.4.8 of this Law shall be paid by the person who is paying such payment.

 

                16.2. Value-added taxes shall be imposed on imported goods and report is to be prepared in a following manner:

 

                16.2.1. Customs organization shall impose value-added tax on imported goods as specified in articles 7.1.3 and 8.1.1 of this Law in accordance with articles 9.1.1 and 11.1 of the same Law and take measures of making the taxes paid to the budget;

 

                16.2.2. Importer shall transfer the taxes imposed in accordance with the article 16.2.1 of this Law to consolidated account of the state treasury:

 

                16.2.3. Central Customs organization shall prepare the monthly report on the value-added tax payment before the 10th day of the following month and annual report before the 15th of January of the following year and submit it to the State Central administration in charge of financial matters;

/This subparagraph was amended by the Law of May 20, 2008./

 

16.2.4. Value-added tax which shall be imposed on automotive gasoline and diesel fuel imported for the purpose of creating company reserve shall be imposed based on the Government resolution listing the names of the economic entities those are to create company reserve, amount and quantity of mandatory reserve of automotive gasoline and diesel fuel, and a period of its re-charge on a day when the sale to create the company’s reserve started;

 

                16.2.5.Value-added tax which is to be imposed on automotive gasoline and diesel fuel equals to the amount which is required for 30 day usage of Mongolia other than those imported to create company reserve by the company which holds the special license to run trading and manufacturing of crude oil products, shall be imposed after 30 days.

/Above mentioned articles 16.2.4 and 16.2.5 was added by the Law of December 21, 2007./

 

16.3. Value-added tax report form of the imported goods specified in article 16.1 of this Law shall be approved by the head of Central customs organizations.

/This subparagraph was amended by the Law of May 20, 2008./

 

                16.4. Customs organization shall provide all the information on value-added tax imposed on imported goods and paid at the demand of tax authority.

 

 

 

CHAPTER NINE

Liabilities for violators of value-added tax law

 

 

                Article 17. Liabilities for violators of value-added tax law

 

                         17.1. If it is determined that an individual or legal person, who must have been registered as value added tax payer according to Articles 6.1 and 6.2 of this Law, has manufactured or sold goods, as well as performed works and rendered services, and has not paid value-added tax without getting registered so with respective tax authority or obtaining a certificate, competent state inspector shall make the tax paid in compensation and impose following liabilities:

 

17.1.1. to impose a 0.3 percent interest on total sum of value-added tax which is to be paid in compensation;

 

17.1.2. to impose a fine of not more than 50 percent of the total sum of value-added tax which is to be paid in compensation.

 

                        17.2. If it is determined that an individual or legal entity who was registered as value added tax payer has not imposed the value-added tax on its goods sold or manufactured, works performed and services provided or has not paid the tax after imposition, competent state inspector shall impose the liabilities specified in article 17.1 of this Law.

 

                        17.3. If it is determined that the goods were sold or manufactured, as well as works were performed and services were provided without having registered and issued certificate in accordance with the articles 6.1 and 6.2 of this Law and failed to pay the value-added tax even though it was imposed on them, competent state inspector shall make the tax paid in compensation and impose interest specified in article 17.1.1 of this Law and fine not more than total amount of the tax which is to be paid in compensation.

 

 

 

CHAPTER TEN

Miscellaneous

 

 

Article 18. Coming into force of Law

 

 

18.1. The present law shall come into force from the first day of January, 2007.

 

 

 

 

 

 

SPEAKER OF GREAT

KHURAL OF MONGOLIA                                                   TS.NYAMDORJ



[1] General Taxation Law-No 1, 1993, State Information bulletin

[2] Law on State registration of Legal entity-State information bulletin, Number 22, 2003

[3] Law on Accounting- No 4, 2002, State Information Bulletin,

[4] Law on Auto transportation-State information bulletin, number 28, 1999

Сүүлд шинэчлэгдсэн: 2012 оны 3-р сарын 27, Мягмар гариг, 18:10
 

Law of Mongolia on Social insurance

LAW OF MONGOLIA ON SOCIAL NSURANCE

 31 May 1994                                                                                                                                           Ulaanbaatar city

Amended November 2007

Amended May 2008                                                          

CHAPTER ONE GENERAL

PROVISIONS

 

Article 1. Purpose of the law

 The purpose of this law is to define the types and forms of social insurance, and the scope of its effect, to determine the legal basis for payment of insurance premiums, formation of the social insurance fund and its administration, social insurance institutions and the activities of social insurance inspectors, and to regulate relations pertaining to their implementation.

 Article 2. Legislation on social insurance

 1.             The tax legislation shall comprise of the Constitution of Mongolia, this Law and other legislative acts enacted in conformity therewith.

2.             Unless the International treaties of Mongolia stipulate otherwise than tax legislation of Mongolia, the provisions of international treaties shall prevail.

 Article 21. Definition of legal terms

 1.     For the purposes of this law, following terms shall have the following meanings:

 

1)          “the insured” a person who insured and paid social insurance premium to the social insurance fund and entitled to receive pensions, benefits and payments from the social insurance fund as provided by law and insurance policy;


 

2)          “social insurance authority” is a legal person operating activities with the purpose of furnishing the social insurance fund resources by premiums paid by the employers and/or the insured and other sources stipulated by law, and providing pensions, benefits and payments to the insured;


 

3)          “social insurance fund” is the monetary fund furnished from premium revenue for the purpose of providing payment for pension, benefit, payments and services and covering the operational costs of social insurance which is paid by the employer’s payroll and wages of insured or similar incomes and other sources;


 

4)          “social insurance premium” is the advance payment to be paid by the insured and employer due to deadline as stipulated by the law for the purpose of being covered by the social insurance;


 

5)          “payment date of social insurance premium” is the day when the employer and/or insured transferred the social insurance premium to the social insurance fund;

 

6)          “right to choose the pension type” is the right of the insured to choose the pension in event of two or more pension options are presented in accordance with the terms and conditions stipulated by that law on pensions and benefits to be offered from the social insurance fund;

 

7)           “premium payer” is the legal person responsible to pay social insurance premiums in accordance with the laws and regulations;

 

8)          “pension” is the monetary amount to be provided monthly from the social insurance fund to the insured who reached official pensioner’s age for rest of his/her life, until regaining his/her ability of work or reaching pensioner’s age when he or she became disabled, and to his or her family members (children until 16 years of age, if in school, until 19 years of age) when the insured is deceased with the purpose of ensuring social welfare guarantee;

 

9)          “benefit” is the monetary amount to be provided once from the social insurance fund to the insured in event of temporary loss of work ability, pregnancy, maternity leave and mortality;

 

10)       “payment” is the variable cost of sanatorium and hydropath services for the treatment of occupational diseases and cost of artificial organs and therapy to be provided from the social insurance fund to the insured who has lost 30 or more percent of his or her work ability due to the industrial accident and occupational disease;

 

11)       “variable cost of sanatorium and hydropath services” is the payment to be provided from the industrial accident and occupational disease insurance fund with the purpose of covering the cost of sanatorium services for the treatment of the insured who became disabled due to the industrial accident and occupational disease.

 

12)       “Accumulation fund” is the monetary fund reserved for the purpose of increasing revenue of the pension insurance premium account and funds of the social insurance fund. /This clause was added by the law in 5 May 2008/

 

Article 3. Social insurance and its types

 

1.                    Social insurance is a socioeconomic measure including the payment of insurance premiums by citizens (hereinafter referred to as insured), state and business entities and organizations in accordance with the prescribed procedure, the formation of social insurance funds and payment of pensions, benefits and payments, as provided by law to an insured directly in case of retirement, loss of the ability to work, sickness, or unemployment, and to his or her dependents in case of death.

 

2.                    There shall be the following types of social insurance:

 

1)     pension insurance;

 

2)     benefit insurance;

 

3)     health insurance;

 

4)     industrial accident and occupational disease insurance;

 

5)     unemployment insurance.

 

Article 4. Social insurance forms and scope

 

1.                    Social insurance shall be either compulsory or voluntary.

               

2. Persons employed on a contract basis by business entities, organizations, or individuals (hereinafter referred to as employers), and government servants are subject to compulsory insurance, unless other wise provided by law. Herdsmen employed by business entities, organizations or individuals on a contract basis shall be considered as contracted employees.

2.                    The following employees will maintain compulsory social insurance.

 

1)     Citizens of Mongolia, foreign citizens, and stateless persons employed under labor agreement with business entity of all types of ownership, non governmental organization, religious and other organizations and individuals or contract made with individuals pursuant to 343 and 359 of the Civil code; [LLX: within the territory of Mongolia is missing]

 

2)     Citizens of Mongolia, foreign citizens, and stateless persons employed by foreign business entities operating in the territory of Mongolia, and projects and programs implemented with foreign loan and aid, diplomatic representative offices of foreign countries, and international organizations unless otherwise stated in international agreements to which Mongolia is a party;

 

3)     Public servants unless otherwise stated in laws; and

 

4)     Citizens of Mongolia employed abroad under employment contract.

 

/This section was modified by the law in 5 May 2008/

3. Citizens engaged in any production or services not included in provision 2 of this Article shall decide themselves whether to register with social insurance in accordance with the conditions and procedures provided in this law, and which types of insurance to choose.

3.                    Citizens of Mongolia, foreign citizens, and stateless persons who are not engaged in a specific employment other than those stated in Section 2 of Article 4 of this law may be insured voluntarily for insurance mentioned in Clause 1, 2, and 4 of Section 2 of Article 3 of this law according to terms and conditions of this law. The voluntary insured will be covered under each type of social insurance mentioned above. /This section was modified by the law in 5 May 2008/

 

4. Foreigners and stateless persons residing in Mongolia and employed by any Mongolian organization, and citizens of Mongolia employed by foreign organizations or business entities carrying out their activities in the territory of Mongolia, shall register with the social insurance legislation, unless otherwise provided in an international agreement to which Mongolia is a party. /This section was annuled by the law in 5 May 2008/

 

4.                    Compulsory social insurance terms and procedures for self employees, herders and private businesses might be described by relevant legislation.

 

5.                    Pensioner employed under employment contract made with employer or employed under contract made with an individual according to Article 343 and 359 of the Civil code shall be insured for types of insurance other those stated in 3 and 5 of Section 2 of Article 3 of this law. /This section was added by the law in 5 May 2008/

 

Article 5. Social insurance contract

 

An insured, as defined in clause 3 of Article 4, shall conclude a contract with an insurer in accordance with the terms and procedures of this law.

 

Article 6. Entitlement to pensions and benefits from the Social Insurance Fund

 

1.                    Citizens who have registered for social insurance and who have paid insurance premiums in accordance with the terms and procedure provided by this law shall be entitled to receive the pensions and benefits by law.

 

2.                    The employer shall be fully responsible for damages sustained by the insured whose social insurance premium has not been paid through the fault of the employer. /This section was modified by the law in 5 May 2008/

 

3.                    Conditions for non-payment of certain types of pensions, benefits and payments from the social insurance fund may be determined by law.

 

Article 7. Choosing pensions and benefits from the social insurance funds

 

The insured shall not be entitled to receive both pension and benefit from same type of social insurance fund. If there is any overlapping, the insured is entitled to choose only once the pension or benefit with more favorable terms and conditions

 

Article 8. Decision on paying pensions, benefits and payments

 

1.                    Decisions on whether to pay pensions, benefits and payments to the insured shall be made by a social insurance authority on the basis of the insured body’s application and other documents required by law.

 

2.                    The period for considering requests shall be determined by law.

 

CHAPTER TWO

SOCIAL INSURANCE FUND

 

Article 9. Types of social insurance fund

 

Each type of social insurance shall have the following independent monetary funds /This paragraph was amended by Law of January 17, 1997/:

       1) pension insurance fund;

       2) benefit insurance fund;

       3) health insurance fund;

       4) industrial accident and occupational disease insurance fund;

       5) unemployment insurance fund.

 

Article 10. Income sources for Social Insurance Fund

 

1.             Income for the social insurance fund shall come from the following
sources:

 

1)     social insurance premiums paid by insured;

 

2)     social insurance premiums paid by employers;

 

3)     bank interest  on income earned from the sale of securities on deposits of the uncommitted balance; /This clause was modified by the law in 5 May 2008/

 

4)     sanctions imposed for delaying social insurance premiums;

 

5)     contributions from the state central budget; and

 

6)     other sources.

 

2.             /The paragraph was annulled by Law of January 15, 1998/

 

Article 11. Social insurance fund spending

 

1.            The social insurance fund shall be spent in accordance with the
conditions and procedures provided by law for the following purposes:

tpaying pensions and benefits;

 

1)     granting benefits and pension

 

2)     financing the cost of social insurance organization, national and branch council’s activities; and /This clause was modified by the law in 5 May 2008/

 

3)     financing other payments and costs provided by law.

 

2.            It is prohibited to transfer and spend social insurance funds between funds, unless otherwise provided by law. /This section was modified by the law in 5 May 2008/

 

3.            Funds of the accumulation fund can be increased by depositing in commercial bank and purchasing the Government bonds and securities issued by Mongolbank. /This section was modified by the law in 5 May 2008/

 

4.            Amount of funds to purchase securities of Mongolbank from the accumulation fund shall be included in the annual budget of the social insurance fund and approved by the Parliament. /This section was modified by the law in 5 May 2008/

 

5.            A Cabinet member in charge of financial and social welfare issues, Mongolbank, and the National council of social insurance will jointly set the amount of funds from the accumulation fund to be deposited in commercial bank. /This section was modified by the law in 5 May 2008/

 

Article 12. Approval of the social insurance fund expenditure and revenue budget

 

1.                    Parliament shall approve annual profit and withdrawal of each Social Insurance Funds.

 

2.                    The National council of social insurance shall develop the draft budget of social insurance fund in compliance with the Law on management and funding of public organizations and the Law on unified budget of Mongolia and submit to the State central administrative body in charge of social insurance issue.

 

The State central administrative body in charge of social insurance issue shall submit the draft budget of the social insurance fund to the State central administrative body in charge of budget issue within August 15 of each year.

The State central administrative body in charge of financial issue will submit the draft budget of the social insurance fund along with the current year draft budget to the Government.

The Government will submit the draft budget of the social insurance fund along with the draft budget of the country to the Parliament within October 1. /This section was added by the law in 5 May 2008/

 

3.                    The State central administrative body in charge of financial issue will submit the draft budget of the social insurance fund along with the current year draft budget to the Government.Funds for pension and benefits to be granted to certain social insurance fund from state budget according to obligation created prior to this law shall be established annually by Budget Law. /This section was modified by the law in 5 May 2008/

 

4.                    The Government will submit the draft budget of the social insurance fund along with the draft budget of the country to the Parliament within October 1.Ministry of Finance shall transfer the funds approved as set forth in paragraph 2 of this Article to relevant fund within first 10 days of the particular month according to monthly schedule. /This section was modified by the law in 5 May 2008/

 

Article 13. Social insurance fund balance statement preparation and reporting

 

1.       The social insurance central authority shall supervise the expenditure and revenue of each social insurance fund, prepare quarterly and annual overall balance statements within the time limits given below, and report to the National Council:

 

1)       Soum and district social insurance authorities shall submit revenue and expenditure statements for each social insurance fund to the aimag and capital city social insurance authorities within each quarter before the 15th of the following month, and the aimag and capital city social insurance authorities shall submit those statements to the central social insurance authority within each quarter before the 25th of the following month.

 

2)       The central social insurance authority shall submit quarterly overall statements of each social insurance fund to the National Council by the fifth of the second month of the following quarter, and the annual final overall statement before the 20th February of the following year.

 

3)       The National Council shall revise and discuss the quarterly overall statements before the 10th of the last month of the following quarter, and the annual statements by the end of the first quarter of the next year.

 

2.           If necessary, excess money in the social insurance funds, may be centralized once each quarter in the relevant fund of the appropriate higher level social insurance authority. If transfer of this excess to and use of in the next month or quarter is necessary, permission shall be obtained from the appropriate higher level social insurance authority.

 

3.           The State central administrative body in charge of financial issue will include performance of the budget of the social insurance fund in the report stated in 37.1 of the Law on management and funding of public organizations and report to the Government and the Parliament. /This section was added by the law in 5 May 2008/

 

4.           Audit shall be conducted on the report on expenditure of the social insurance fund according to the State audit Law and conclusion shall be made. /This section was added by the law in 5 May 2008/

 

5.           The report stated in Article 13.3 of this law and the audit conclusion stated in Section 4 of the said Article shall be discussed by the Parliament and announced publicly upon publication in daily newspaper within 20 days of approval of the budget performance of the country. /This section was added by the law in 5 May 2008/

 

Article 14. Registration and report of the Social insurance fund

 

1.                    Local social insurance authorities shall record the insurance premiums paid by each employer and insured to all types of funds according to the social insurance booklets and certificates issued to each of them.

 

2.                    The primary recording form for collecting money in social insurance funds and its spending, and the procedures for keeping it and preparing statements shall be approved by the Government member in charge of social insurance issues.

 

 

CHAPTER THREE

 SOCIAL INSURANCE PREMIUM

 

Article 15. Social insurance premium amount and payment schedule

 

1.       The insured employee and the employer as referred to in paragraph 2 and 4 of Article 4 of this law shall pay monthly social insurance premiums in the following amounts:

 

Social Insurance type

Amount of premium payable (by percentage)

employer's payroll and similar income

insured’s salary and similar income

 pension insurance

7.0

7.0

benefit insurance

0.5

0.5

medical insurance

 

2.0

2.0

unemployment insurance

0.5

0.5

Total insurance premium

10.0

10.0

 

2.                    The minimum amount of social insurance premium payable by the insured stated in Section 3 of Article 4 of this law shall not be less than 10% for pension insurance on the minimum wage in force at the given period and approved by the Government and 1.0% for each insurance of benefits, industrial accidents and occupational diseases. /This section was modified by the law in 5 May 2008/

 

3.                    The premium for health insurance shall be defined by the Citizens' Health Insurance Law.

 

4.                    Employers shall pay in the full amount for industrial accident and occupational disease insurance on behalf of the insured as referred to in Article 4.2 of this law.

 

5.                    Amount of social insurance premium on industrial accident and occupational disease shall be established at a different rate up to 3% of employer’s payroll fund and similar income depending on operational security and hygiene requirements. Government, based on the proposals of the National Social Insurance Council, shall approve a list of employers who must pay at a different rate and the amount of payment. [See Gov. Res., April 8, 2008]

 

6.                    Based on the proposal of the Social Insurance National Council, the Government shall describe a list of professions and specifications where the factors of work condition that negatively effect employees’ health are not able to be decided within the labor protection and security requirements and those professions that require to work in the higher temperature or under the land.

 

7.                    The Government shall set the maximum amount of premium payable income of the insured differently based on average salary, wage, and similar income provided by the Statistical committee and suggestions of the National council of social insurance for each type of insurance stated Section 1 of Article 4 of this Social insurance Law. /This section was added by the law in 5 May 2008/

 

8.                    Amount of social insurance premium to be paid by citizens of Mongolia employed abroad shall be set by the National council of social insurance. /This section was added by the law in 5 May 2008/

 

Article 16. Procedure for payment of social insurance premiums

 

1.                    Employers shall retain social insurance premium due to be paid by the insured from their wages and other similar income at each payment, calculated in the amounts and in the proportions stated in paragraph 1 of Article 15 of this law, and the central bank account of the insurance authority shall transfer it to to the bank account of the social insurance fund within that month. /This section was modified by the law in 5 May 2008/

 

2.                    Premiums shall be calculated according to the premium report or the employer's payroll and similar revenue, the insured’s wages and similar income, and premium identifying sheet, and shall be paid by means of a bank. The insured referred to in paragraph 3 of Article 4 of this law may pay his or her premiums in cash.

 

 

3.                    The monthly premiums to be paid by the insured and employers, as referred to in Article 4.2 of this law, shall be paid before the 5th of the following month. The deadline for paying premiums and reporting is the same for all types of social insurance. If this deadline coincides with a weekend or public holiday, the premium shall be paid and reported next working day.

 

4.                    The calculation of the premium to be paid by an insured referred to in paragraph 2 of Article 4 of this law, shall be done by the accountant of the relevant business entity or organization, and for an insured referred to in Article 4.3 of this law by an employee of the social insurance authority.

 

5.                    A foreign entity, a foreign business enterprise and international institutions carrying out any activities in the territory of Mongolia shall the social insurance organization within the territory pay transfer to the social insurance fund account within that territory at the rate stated Article 15.1 and Article 16.1, 16.2, 16.4 & 16.4 of this Law. /This section was modified by the law in 5 May 2008/

 

6.                    An insured referred to in Article 4.3 of this law shall pay premiums in accordance with the contract concluded with the insurer.

 

7.                    Employee employed under employment contract by a business entity engaged in seasonal business for less than 7 months in a calendar year shall be deemed to have been insured for the whole year. /This section was added by the law in 5 May 2008/

 

8.                    Social insurance premium for the employee stated Article 16.7 shall be paid at rate of premium to be paid by the employer stated in Article 15.1 of this law. /This section was added by the law in 5 May 2008/

 

Article 17. The duty of the employer and employee to pay insurance premiums

 

1.       Employers and insured as defined in paragraph 2 of Article 4 of this law
shall assume the following duties:

 

1)    to honestly and correctly calculate the payroll and similar income and the premium levied on them, and to pay it by the due date;

 

2)    to submit information and reports in respect of imposing and paying premiums to the insurance authority;

 

3)    to keep primary and accounting records related to social insurance in proper order and to prepare balance statements;

 

4)    to meet the legitimate demands of the competent authority or official to eliminate any violation of social insurance legislation.

 

3.                    An insured as defined in Article 4.3 of this law shall discharge the duties in respect of paying the social insurance premiums provided in the insurance contract concluded with the insurer.

 

 

Article 18. Termination, transfer, and suspension of duty to pay premiums

 

1.             The duty to pay premiums shall terminate in the following cases:

 

1)       on the death of the insured or if the insured is declared to be deceased;

 

2)       on the employer's dissolution or bankruptcy;

 

3)       on expiry of the term of the insurance policy;

 

4)       on termination of a labor contract.

 

2.                    If an employer merges, splits or undergoes any other form of reorganization, the duty to pay premiums shall be assigned to the newly formed entity.

 

3.                    As provided in paragraph 5 of Article 19 of this law, complaints of the insured shall not form a basis for halting or terminating the duty to pay premiums. Only a decision of the appropriate level court considering complaint may lead to suspension of the payment of premiums.

 

 

4.                    If an employer becomes bankrupt or dissolves for other reasons, the dissolution commission or the creditors’ council shall transfer any unpaid premium from the employer’s property to the appropriate social insurance fund in accordance with the procedure stipulated by law.

 

Article 19. Rights of employers and the insured on paying premiums

 

Employers and insured shall enjoy the following rights to in respect of payment of premiums:

1)             to familiarize themselves with the audit reports or deeds of the social insurance authority or inspector, and if necessary to make comments;

 

2)             to receive or give comments on the imposition or payment of premiums, and to audit results;

 

3)             to be compensated for damage caused by the fault of the social insurance authority or its employees in accordance with the procedures provided in law;

 

4)             to recover excesses of premiums paid or to have them deducted from the next premium;

 

5)             to make complaints about unlawful actions of the social insurance authority or its employees to their higher authorities or officials, and shall take court action if in disagreement with their decision.

 

Article 20. Liabilities

 

1.             If breach of the social insurance legislation does not involve criminal
responsibility the social insurance premium the payer shall incur the following
liabilities:

1)       if an employer has willfully concealed or reduced the payroll and similar income on which premiums are imposed, the premium that would have been imposed on the concealed or reduced the revenues shall be paid and penalties equal to the revenue will be imposed. The amount of this penalty shall not exceed 50% of payable premium; /This clause was modified by the law in 5 May 2008/

 

2)       penalties at the rate of 0.3 % of the total amount of underpaid or outstanding premium shall be imposed for each day the premium is in arrears.  The amount of this penalty shall not exceed 50% of payable premium; /This clause was modified by the law in 5 May 2008/

 

3)       if underpayment of the premium is due to errors in calculation, the underpaid premium shall be paid and penalties imposed at the rate of 0.1% for each day after the calculation error, but the total amount of the penalties shall not exceed 30% of the underpaid premium;

 

4)       In event of breaching the paragraphs 1 and 3 of Article 16 of the law, not officially opening registered social insurance book and causing damages the insured’s rights and entitlements because of such infringements, a fine of 10000-50000 tugrugs shall be imposed to the responsible official and 50000-250000 tugrugs to the responsible organization or business entity respectively;

 

5)       In event of disbursing or using the resources of social insurance fund for non-intended purpose, the illegally obtained income or assets shall be confiscated and a fine of 5000-50000 tugrugs shall be imposed to the responsible official and 100000-250000 tugrugs to the responsible organization or business entity respectively;

 

6)       A fine of 10000-50000 tugrugs shall be imposed to the official who wrongly determined the reason of work ability lose, percentage, time duration and labor conditions;

7)       other liabilities provided by the law.

 

2.                    If pensions, benefits or payments are set without justifiable basis or in excessive amounts as result of compiling false documents or providing wrong information, the unjustified pensions, benefits and payments shall be paid back and a fine of 5000-30000 tugrugs for the citizen, 30000-60000 tugrugs shall be imposed respectively for the responsible official and 100000-250000 tugrugs to the responsible organization or business entity.

3.                    If pensions and benefits are not paid at the due time a penalty shall be paid for each day of delaing in the amount calculated at the current interest rate in deposits of the bank issuing the pension or benefit, based on the total amount of pension or benefit and the guilty employee will be imposed under penalty equal to 25000-50000 tugrugs.

 

4. Subparagraph 2 of paragraph 1, paragraphs 2 and 3 of the present Article are applied to insured as defined in paragraph 3 of Article 4 of this law.

 

CHAPTER FOUR

SOCIAL INSURANCE AUTHORITY

 

Article 21. System of social insurance authority

 

1.                    The structure of the social insurance institutions shall consist of the social insurance central authority (General Board of National Social Insurance), and local branches and units (inspectors and representatives)

 

2.                    A dispute settlement council (non-staff) designed to resolve disputes arising between employers and the insured on the one side, and the social insurance authorities on the other, shall be established and attached to the central and local social insurance authorities.

 

3.                    The charters of the social insurance authorities and of the Council referred to in paragraph 2 of this article, shall be approved by the Government.

 

Article 22. Governance of the social insurance authority

 

1.                    The central social insurance authority shall function under the authority of the Government member in charge of social insurance issues, and local authorities shall function under the authority of the relevant level Governors and higher level social insurance authorities.

 

2.                    The central social insurance authority shall provide local authorities with technical and methodological guidance.

 

3.                    According to the paragraph 1 of Article 45 of Law on Financing and management of State budgeted authorities, the head of the social insurance central authority shall be nominated by the Government member in charge of social insurance issues in consultation with the social insurance National Council, and the heads of local social insurance authorities shall be nominated by the chairman of higher level social insurance authorities in consultation with appropriate level Governors.

 

4.                    Heads of aimag, capital city and district social insurance offices and departments shall be selected and appointed by social insurance authority in accordance with Article 17.1 of the State office law from public servants working in social insurance authority no less than 3 years.

 

Article 23. Principles of the activities of social insurance authorities and social insurance inspectors

 

Social insurance authorities shall uphold the principle of self-financing, and social insurance inspectors shall uphold the principle of respect for law, not being influenced by others, respect for and protection of the legitimate rights and interests of the insured.

 

Article 24. Functions of social insurance authorities

 

Social insurance authorities shall discharge the following functions:

 

1)             to organize the enforcement of social insurance legislation;

 

2)             to form social insurance funds and ensure the management of their expenditure and revenue;

 

3)             to organize timely payment of the relevant types of pensions and benefits from social insurance funds, and to improve the service;

 

4)             to make research with regard to perfecting the national social insurance system, activities and their forms, and to prepare proposals and to decide on them, or submit them to the relevant authorities for making decision;

 

5)             to control the activities of lower level authorities;

 

6)             to discharge other functions provided by law.

 

Article 25. Rights of social insurance authorities

 

1.       Social insurance authorities shall enjoy the following rights:

 

1)       to impose premiums on employers whose payroll and similar revenue cannot be determined as a result of lack of primary and accounting records, according to those imposed on other employers engaged in similar production or services;

 

2)       to stop withdrawals from the bank accounts of employers who fail to pay premiums at the due time until payment is made;

 

3)       to receive the appropriate amount in accordance with law from the property of employers who fail to pay overdue premiums, arrears, penalties and fines set out in an account presented by a social insurance inspector.

 

4)       to deduct excess premiums from the premium payable in the following month, quarter or year or if the premium payer wishes the excess may be repaid within 30 days after the calculation is made;

 

5)       to oblige an employer who avoids paying premiums, arrears, penalties and fines, or who fails to send premium information and reports in time, to undertake measures to eliminate violations discovered by a social insurance authority control and audit and to bear the responsibility provided by law;

 

6)       to revoke or amend decisions made by lower level social insurance authorities, if they are found to be unreasonable;

 

7)       to obtain free of charge from employers and insured any information, research, and other relevant documents required for auditing.

 

Article 26. Rights and liabilities of social insurance inspectors

 

1.             A social insurance employee, who has worked for a social insurance
authority for not less than 2 years and has gained high qualification and a
professional degree, shall be granted the rights of a social insurance inspector based
on the recommendation of the central social insurance authority and by the decision
of the Government member in-charge of social insurance matters. The charter of the
social insurance inspectors shall be approved by the Government.

 

2.       Social insurance inspectors shall enjoy the following rights:

 

1)     to control and audit the imposition and payment of premiums, accounting records, balance statements and other financial documents, and to obtain statements and reference documents;

2)     to obtain copies of documents exclusively required for social insurance audit and control free to charge from the employer's correspondent bank and financial organizations;

 

3)     to temporarily take away from an employer or insured documents the prove the concealing of income on which premiums could be imposed and copy them;

 

4)    to oblige the premium payer to pay the unpaid premium in due time and
re-imposed premiums, penalties, interests and fines

 

5)   to oblige employers and insured to meet their liabilities provided by this law;

 

6)   to inform to relevant organization about unlawful actions of employers and insured, discovered while discharging their own official functions.

 

7)   to check the workplace and number of employees of an organization or business entity against the payroll and paid premium records;

 

8)   to impose legalized liabilities to those officials who have breached the law by willingly concealing the number of employees or employing people without any labor contracts or providing salary lower than the minimum wage or creating debts due to unpaid social insurance premiums or not transferring premiums paid by the employees to the proper social insurance fund and if necessary, to address the matter to law enforcement authorities for resolution;

 

9)   to disseminate information through mass media about the activities of an organization, business entity or an official who has repeatedly breached the social insurance law provisions.

 

3. Social insurance inspectors who fail to discharge their own official duties by concealing unlawful actions related to premium payment, using premium revenue for private purposes, being bribed or exceeding their own rights, shall bear disciplinary, administrative, material and criminal responsibilities.

 

Article 261. Social guarantee, qualification rank and rank allowance of social insurance inspectors

 

1.       The following aids shall be granted to the social insurance inspector or his
or her family in case the social insurance inspector temporary lost his or her work
ability, became disabled or lost his or her life because of other’s involvement:

 

1)       in case of temporary loss of work ability, work absence benefit during the hospitalized period plus the basic salary difference;

 

2)       in case of permanent disability, disability pension, and basic salary difference;

3)       in case of death, one-time grant aid equivalent to 3 years’ basic salary to his or her family.

 

2.                    The aid stipulated in subparagraph 3 of paragraph 1 of Article 261, of present law shall be granted by the institution where he or she worked and damage shall be reimbursed by the guilty party in accordance with the law.

 

3.                    The social insurance inspector shall have a qualification rank. The Government shall set the qualification rank and rank allowance procedures.

 

4.                    Performance-based cash bonus could be awarded to the social insurance inspector. The Government shall set the procedure for cash bonus award.

 

5.                    The social insurance inspector shall wear a special free-of-charge uniform suited to the service specifics. The special uniform of the social insurance inspector, the badge design, instruction of use and wear-and-tear periods shall be approved by the Central Social Insurance Authority

 

Article 27. National Council of Social Insurance

 

2.             The Parliament will establish the National Council of Social Insurance (hereinafter referred to as “National Council”) consisting of equal numbers of non staff members representing the Government, the insured and employers and put it into operation. The National Council shall report to the Parliament of Mongolia.

 

3.             The Parliament shall appoint the head and members of the National
Council for six years as offered by the relevant parties. The National Council shall
consist of the following:

 

1)       as the government representative, one person each from the state central administrative organizations in charge of finance, justice and labor issues.

 

2)       as the insured representative, three people from the Trade Unions that can legally represent and protect rights and interests of absolute majority of total employees.

 

3)       three people representing employer. Chairman of the National Council shall appoint the Deputy chairman of the National Council for two years from the representatives, in consultation with three parties.

 

The National council will have an office.[DDK1]  /This clause was modified by the law in 5 May 2008/

 

3.             The National Council shall exercise the following powers:

 

1)          to develop proposals on the strengthening of social insurance legislation acts, system and operation and on salary increase and to get the proposals solved by relevant institutions;

2)          /This clause was annuled by the law in 5 May 2008/

 

3)          to monitor the implementation of social insurance legislation acts and the revenue and expenditure matters of the social insurance fund;

 

4)          to discuss reports of the social insurance organization on the social insurance operation, human resource provision and financial issues, to make a conclusion and take relevant measures;

 

5)          to monitor computer service, database, technology and equipment of social insurance organizations and evaluate their work;

 

6)          Approve the structure of the central body of social insurance, develop draft budget of the social insurance fund, and approve detailed schedule of the approved budget and monitor its performance; /This clause was modified by the law in 5 May 2008/

 

7)          to submit recommendations and procedures on social insurance issues;

 

8)          to control the activities of Monitor and strengthen operation of Medical and Labor Accreditation Commission and Complaint Requirement Council with regard to develop;

9)          to discuss and decide on taking corrective action on the petitions and complaints of citizens on the social insurance, medical and labor accreditation issues;

 

10)       Other particular powers stated in the legislation.

 

4.                    The relevant Standing Committee of the Parliament shall approve the charter of the National Council.

5.                    Additions to the salary of members of the National Council may be paid each quarter depending on their participation in its work. The maximum addition to salary shall be determined by the Government based on the proposal of the central public administrative organization in charge of social insurance issues.

 

CHAPTER FIVE

MEDICAL LABOR EXAMINATIONS

 

Article 28. Notion about medical labor examination

 

1.             A medical labor examination is a professional process to establish reasons for losing normal physical ability and for becoming disabled /losing completely or partially working abilities/, the degree and duration of disability.

 

2.             The Cabinet member in charge of health and social insurance issues will jointly approve list of diseases to use to ascertain lost time and injury due to common and occupation diseases, percentage and period of lost time and injury. /This section was added by the law in 5 May 2008/

 

Article 29. Organization in charge of medical labor examination

 

1.                    Medical labor examinations shall be carried out by a medical labor examination commission consisting of professional physicians and representatives of institutions protecting the rights and interests of social insurance employers and insured.

 

2.                    The medical labor examination commission shall determine the whether the working disability is due to the normal disease, general injuries, industrial accidents or occupational diseases and the degree and duration of disability.

 

3.                    The medical and labor examination central commission shall operate attached to the social insurance central authority, and local medical labor examination commissions shall operate attached to the aimag, capital city and district social insurance authorities.

4.                    Medical labor examination commissions may be set up in soums.

 

5.                    The charters of medical labor examination commissions shall be approved by the Government.

 

CHAPTER SIX OTHER PROVISIONS

 

Article 30. Social insurance documents

 

1.                    Each insured shall have a social insurance booklet with the state registration number.

 

2.                    Employers registered with the central and local tax administrations in accordance with law and paying premiums shall have a social insurance certificate with the state number.

 

Article 301. Individual contribution account for pension insurance

 

1.                    An insured who was born on and after the January 1, 1960 shall have the individual contribution account for pension insurance.

 

2.                    Relation of the individual contribution account of pension insurance shall be regulated by law.

 

Article 31. Financing the operational and investment expenses of social insurance

 

1.             The operational and investment expenses of social insurance shall be financed from the revenue of social insurance fund.

 

2. Budget of social insurance activities funded from revenue of the social insurance fund and investment costs will be set according to the Law on budget of the social insurance fund. /This section was modified by the law in 5 May 2008/

 

Article 32. Wage and similar income subject to imposition of social insurance premium

 

1.            Social insurance premium shall be imposed on the following wages and similar income:

1/ Salaries stated in Section 1 of Article 47 of the Labor Law and allowances stated in 55, 56, 57, 59, 64, 66, and 69 of the same Law;

2/ Payment agreed under contracts stated in Article 343 and 359 of the Civil code;

3/ Income declared by the insured himself/herself as stated in Section 3 of Article 4 of this law;

4/ Accommodation and transport allowance, concessions for residence, firewood, and coal and similar income issued by business entity to its employees.

/This Article was modified by the law in 5 May 2008/

 

Article 33. Monitoring implementation of social insurance legislation

 

Monitoring implementation of social insurance legislation shall be carried out by the Government, all levels of Governor, and other institutions and officials empowered by legislation.

 

 

 

THE SPEAKER OF THE PARLIAMENT          N. BAGABANDI


 [DDK1]Where does this go?

Сүүлд шинэчлэгдсэн: 2012 оны 3-р сарын 27, Мягмар гариг, 18:03
 

Law of Mongolia on General Taxation

LAW OF MONGOLIA

 May 20, 2008                                                                                                                       Ulaanbaatar city

LAW ON GENERAL TAXATION

(As updated by LLX in August 2008)

CHAPTER ONE

General Provisions

Article 1.  Purpose of the Law

 1.1.         The purpose of this Law is to establish legal grounds for introduction, establishment, imposition, reporting, payment, control and collection of taxes in Mongolia, to define rights, duties and liabilities of taxpayers and tax authorities and to regulate relations arising between them.

 Article 2.  Tax Legislation

 2.1.         The tax legislation shall comprise of the Constitution of Mongolia, this Law and other legislative acts enacted in conformity therewith.

2.2.         Unless the International treaties of Mongolia stipulate otherwise than tax legislation of Mongolia, the provisions of international treaties shall prevail.

 Article 3.  Introduction, Amendment, Exemption and Annulment of Taxes

 3.1.         The Parliament of Mongolia shall have the sole right to introduce, amend, discount, exempt and annul taxes by law.

 3.2.         Relations pertaining to introduction, amendments, exemptions, discounts, imposition and payment of taxes shall be regulated by the Tax Law only, except for cases stipulated below:

         

                3.2.1.      Establishment of a special tax regime in a free zone;

 

3.2.2.      Establishment of a regime to maintain current tax conditions in a stability or investment agreement to be concluded by the Government with investors within amounts and limitations of the right provided by legislation that are effective at the time of conclusion of the agreement.

 

 

Article 4.  Definition of legal terms

 

4.1.         For the purposes of this Law, these terms have the following meaning:

 

4.1.1.      “transferred income” means cashless transfer of payment for work or services rendered by individuals and legal entities on a contract basis to the individual or entity itself or to others at their request.

               

                4.1.2.      "termination of tax payment liability due to invalidation of law on certain type of tax" means invalidation of the law on tax of type in question by the Parliament and completion of the term for tax settlement;

 

                4.1.3.      “electronic tax documents” means set of documents developed, stored, sent or received in an electronic form and certified with digital protection signature in compliance with tax legislation;

 

                4.1.4.      “electronic signature” means a private key of the taxpayer and tax agency created using a certain algorithm for the purpose of authenticating completeness and accuracy of electronic tax documents;

 

                4.1.5.      “integrated database of tax registration and information” means set of software, information and data created, collected, received, developed and stored under the synchronized documents , integrated classification, codes, standards and methodology”.

 

4.1.6.      “tax withholder” means an entity in charge of imposing and withholding taxes on income earned by taxpayers in compliance with the tax law and obligated to transfer it to the state or local budget;

 

                4.1.7.      “tax report” means a tax report of legal entities and a report sheet of individuals that defines their income taxes developed electronically or in writing;

 

                4.1.8.      “legitimate excuses” shall mean:

                               

4.1.8.a.  being sick;

4.1.8.b.  undergoing medical treatment;

4.1.8.c.  caring for a patient;

4.1.8.d.  working on business assignment abroad and locally;

4.1.8.e.  undertaking training;

4.1.8.f.  being on public mobilization;

4.1.8.g. to be imprisoned in zone of public quarantine due to serious contagious disease;

4.1.8.h. sudden fire and natural dangers or force majeure (flood, drought, zud, dangerous snow and dust storms, earthquake, etc.).

 

4.1.9.   “exerted resistance” shall mean the following actions carried out in relation to performing official duties of the state tax inspector:

 

4.1.9.a.  hit;

4.1.9.b.  kicked;

4.1.9.c.  pushed;

4.1.9.a.  splashed with any substances;

4.1.9.d.  exerted physical resistance;

4.1.9.e.  threatened;

4.1.9.f.  verbally insulted;

4.1.9.g.  frightened;

4.1.9.h.  intimidated;

4.1.9.i.  and any other deliberate acts of exerting pressure.

 

 

 

CHAPTER TWO

Taxes of Mongolia

 

Article 5. The Tax composition

 

5.1.         Taxes of Mongolia shall comprise of taxes, fees and payments (hereinafter referred to as "taxes").

 

5.2.         Tax is monetary capital imposed on income, property, goods, work and services of individuals and legal entities in accordance with legislation according to certain amounts and rates established for certain period of time and contributed to the state and local budget without repayment.

 

5.3.         Taxes shall comprise of direct and indirect taxes.

 

5.4.         Direct taxes shall be established in direct proportion to total income, profit and property of individuals and legal entities.

 

5.5.         Indirect taxes shall be established on certain types of goods and services regardless of results of operations of individuals and legal entities.

 

5.6.         Fees shall mean monetary capital that is paid to state and local budgets for the service provided by relevant state organizations to individuals and legal entities in conformity with legislation;

 

5.7.         Payment shall mean monetary capital taken from individuals and legal individuals for use of the state property, subsoil, mineral wealth, forest, plants, mineral spring and water resources, pollution of air, water and soil, and animal hunting and concentrated in state and local budgets, and special funds.

 

 

Article 6. Taxable Items

 

6.1.         Taxable items shall include income, property, goods, work, services, certain rights, land, its sub-soil, natural wealth, mineral resources; and air, soil and water pollution.

 

 

Article 7. Tax Types and Classifications

 

7.1.         Taxes shall be classified into tax types and relations pertaining to certain types of taxes shall be governed by this law and a tax law of the given tax type.

 

7.2.         Certain types of taxes shall pertain to any one of state or local taxes.

 

7.3.         The following taxes, rates of which are established by the Parliament and Government and commonly enforced on territory of Mongolia shall be classified as state taxes:

 

                7.3.1.      economic entities income tax;

                7.3.2.      customs duty;

                7.3.3.      value-added tax;

                7.3.4.      excise tax;

                7.3.5.      tax on petroleum and diesel fuel;

                7.3.6.      royalty;

                7.3.7.      price increase tax on some goods;

                7.3.8.      fees for mineral exploration and mining licenses.

 

7.4.         The following taxes, rates of which are established by the Parliament, Government, the Citizens Representative Assembly of province capital city, soum or district to be concentrated in local budgets or enforced in local areas shall be classified as local taxes:

 

                7.4.1.      individual income tax;

7.4.2.      income tax of individuals engaged in work and services, income of which cannot be immediately determined;

                7.4.3.      immovable property tax;

                7.4.4.      state stamp duty;

                7.4.5.      water and spring water charges;

                7.4.6.      tax on auto and self-propelling vehicles;

                7.4.7.      charges on permit to use of natural resources other than minerals;

                7.4.8.      charges on use of natural plants;

                7.4.9.      charges on use of commonly occurring minerals;

                7.4.10.  charges on use of hunting reserves, hunting permit fees;

                7.4.11.  land charges;

                7.4.12.  charges on procurement and use of wood fuel and timber from forest;

                7.4.13.  gun duty;

                7.4.14.  capital city tax;

                7.4.15.  tax on dogs;

                7.4.16.  tax on inheritance and gifts.

 

 

Article 8. Establishing Tax Rates

 

8.1.         Tax rates shall be established by the Parliament, or the Government and Citizens Representative Assembly of province or capital city as authorized by the Parliament in accordance with legislation.

 

8.2.         The Parliament shall establish rate of taxes other than those specified in 8.3 and 8.4 of this Law.

 

8.3.         The Government shall establish rates of tax on use of water resources specified in 7.4.5 and rates of taxes specified in 7.4.10-7.4.12 of this law within limits approved by the Parliament.

 

8.4.         The Citizens Representative Assembly of province and capital city shall establish rate of tax on use of spring water resources specified in 7.4.5 and rate of tax specified in 7.4.8 of this law within limits approved by the Parliament.

 

 

Article 9.  Forms of Providing Tax Discounts and Exemptions

 

9.1.         Taxpayers shall be provided tax discounts or exemptions in the following forms in accordance with legislation:

 

9.1.1.          reducing taxes imposed;

9.1.2.          reducing tax rates;

9.1.3.          exempting from taxes on income, property, goods, works and services below established minimum;

9.1.4.          exempting taxpayers from taxes;

9.1.5.          exempting from taxes certain parts of taxable items;

9.1.6.          other discounts provided by legislation.

 

 

Article 10.  Termination of Tax Payment Obligation, Transfer Thereof to the Others

 

10.1.       In the following cases, the obligation of the tax payment is considered to terminate:

 

10.1.1.    The specific tax law is canceled;

10.1.2.    The specific tax is fully paid;

10.1.3.    The taxpayer is fully exempt from the specific taxes;

10.1.4.    The taxpayer had died or is considered to have died;

10.1.5.    The taxpayer legal entity has been liquidated.

 

10.2.       Obligation to pay taxes along with any related rights of a taxpayer who had died or is considered to have died shall transfer to the taxpayer's heir.

 

10.3.       Any unpaid or deficient taxes along with any related rights of a re-organized legal entity shall be transferred to a legal entity formed as a result of the re-organization. If the taxpayer legal entity was reorganized by separating, the tax payment obligation shall transfer to them based on taxable items.

 

10.4.       The liquidation commission in case of liquidation and the claimants committee in case of a bankruptcy of the legal entity shall ensure payment of unpaid or deficient taxes from property of the legal entity in accordance with the law and pay to the budget in accordance with article 7 of this law.

 

 

Article 11.  Period for Tax Dispute Settlement

 

11.1.       Time for imposition of tax in arrears, fines and penalties shall be five years. The timeframe for dispute settlement specified in the Civil Code [2] of Mongolia does not pertain to tax legislation.

 

11.2.       Dispute settlement timeframe shall not pertain to payment of tax, fine and penalty debts.

 

11.3.       Start of the timeframe for dispute settlement specified in 11.1 of this law shall be established as follows:

 

11.3.1.        for taxes, reports of which are filed and paid once at the end of the year according to the tax law, from the following business day of the day when the tax report must have been filed and taxes paid as specified by the law on the given type of tax;

 

11.3.2.        for taxes, reports of which are filed and paid on monthly and quarterly basis according to the tax law, from the following business day of the day when the tax report must have been filed and taxes paid at the end of December or the year as specified by the law on the given type of tax;

 

11.3.3.        for taxes paid in deductibles and taxes payable after sales within certain period of time according to the law, from the following business day of the day when the tax report for the given tax type must have been filed.

 

11.3.4.        for taxes payable without issuing a tax report, from the following business day of the day when the tax must have been paid according to the tax on the given type of tax.

 

11.4.       The period for tax dispute settlement shall end on the day when the Tax Authority delivers a notice specified in Article 54 of this Law, and start anew from thereon.

 

11.5.       If the taxpayer ceases his operations or is liquidated, the period for tax dispute settlement shall start from the day the operations stopped.

 

11.6.       The period for dispute settlement of taxes, fees and penalties uncovered and imposed during a tax audit shall start on the day the act executed by the state tax inspector came into force.

 

 

 

CHAPTER THREE

Taxpayer, Rights and Duties Thereof

 

Article 12.  Taxpayer

 

12.1.       Taxpayers shall be individuals and legal entities who assume the obligation to pay taxes by providing works and services, engaging in employment, earning income, property and goods taxable by tax legislation, as well as exploiting land, its subsoil, natural wealth and mineral resources, and polluting air, water and soil.

 

12.2.       Taxpayer individuals and legal entities shall be specifically defined by the law on tax of the given type.

 

 

Article 13.  Taxpayer Registration

 

13.1.       Individuals and legal entities who assume the duty of paying taxes and withholding taxes in accordance with the tax law shall register with tax authority as taxpayers.

 

13.2.       Unless otherwise provided by legislation, a newly established legal entity shall open a file and register with local tax authority within 14 days as a taxpayer of receiving a certificate from a registering organization.

 

13.3.       Owner or holder of taxable items other than income shall open a file and register with local tax authority as a taxpayer within one (1) month of owning or holding this item, unless otherwise specified by legislation.

 

13.4.       The tax authority shall assign a registration number to every taxpayer and tax withholding individual and legal entity, open a file for each and store the following documents and information in the file:

 

13.4.1.        taxpayer individual’s family name, parents’ names, given name, registration number, certificate or book number, home address, telephone number;

13.4.2.        taxpayer legal entity’s name, address, brief introduction of management members, pictures, civil identification card numbers;

13.4.3.        date the legal entity registered as a taxpayer, field of operations;

13.4.4.        certified copy of the report that reflects immovable property evaluation, land ownership status, amount of fixed and working assets, number of employees;

13.4.5.        names and number of investors and branches, their locations, addresses and telephone numbers;

13.4.6.        names and types of taxes payable by the taxpayers, their bank account details;

13.4.7.        copies of balance sheets, acts and notices;

13.4.8.        requisitions, notices, violations acts, reports and directives of audits conducted by the tax authority on the taxpayer;

 

13.5.       The taxpayer shall notify the local tax authority within 20 working days of transferring his ownership right to others by selling or presenting as a gift immovable property;

 

13.6.       Unless otherwise specified by legislation, the taxpayer shall notify the tax authority every time any changes made to the state registration certificate and his personal file within 20 days and have these changes reflected in the registration and personal file.

 

13.7.       Tax paying and tax withholding entities must reflect their taxpayer registration numbers assigned by the tax authority in all reports, information, customs declarations, payments and other necessary documents issued in accordance with the law.

 

13.8.       Failure to be registered as a taxpayer shall not relieve of the duty to impose, pay and withhold taxes, and liability related thereto.

 

13.9.       Taxpayer registration procedure shall be approved by the National Tax Authority.

 

 

Article 14.  Respecting Taxpayer Rights and Legal Interests

 

14.1.       The tax authority and state tax inspectors shall respect taxpayers’ rights and legal interests, and exercise trust when carrying out their plenary rights.

 

14.2.       The tax authority and state tax inspectors shall be prohibited from interfering with activities of taxpayers except for auditing tax imposition and payment, determining imposition of taxes, monitoring tax payments and collecting taxes as specified by the law.

 

14.3.       The tax authority, state tax inspectors and other employees of the tax authority shall be obligated to keep confidentiality of taxpayers’ confidential information defined by the Law on Individual Confidentiality[3] and the Law on Organizational Confidentiality[4] that was made available to them when carrying out their official duties. This information may be made available only to the following civil servants by resolution of the Chief of the Tax Authority:

 

14.3.1.        state tax inspectors, other employees of the tax authority carrying out their official duties in accordance with tax legislation;

14.3.2.        registrars, investigators, prosecutors and judges who assumed the duty of inspecting, monitoring and resolving violations of tax legislation, on issues related to the violation only;

14.3.3.        authorized employees of state tax authorities of other countries in accordance with duties assumed under international treaties of Mongolia.

 

14.4.       Information and facts permitted by law shall be made available based on written consent of the taxpayer only, in cases other than those specified in 14.3 of this Law.

 

14.5.       The tax authority may publicly publish information about a taxpayer who has been proven to violate the tax legislation, evade tax payments or is being sought after, without the permission specified in 14.4 of this Law.

 

 

Article 15.  Serving Taxpayers

 

15.1.       The tax authority and state tax inspectors shall provide the following services to taxpayers to assist them with their duty to pay taxes specified by legislation:

 

15.1.1.        to explain and introduce the tax legislation;

15.1.2.        to provide with instructions, methodology, handbooks and forms related to compliance with the tax legislation, defining tax duties and issuing reports and information;

15.1.3.        to organize training on tax legislation, instructions and methodology;

15.1.4.        to facilitate conditions for taxpayers, in groups or individually, to obtain advice on matters related to performing their tax duties, to provide the advice;

15.1.5.        to publish articles and organize promotions, trainings and informative programs targeted for the public via public media outlets and the tax administration website.

 

 

Article 16.  Providing Professional Advice to Taxpayers

 

16.1.       Relations of a certified and registered consultant to provide services to taxpayers on performing their tax duties defined by the legislation and protecting their legal interests shall be regulated by the law.

 

 

Article 17.  Taxpayer Rights

 

17.1.    Taxpayers shall exercise the following rights:

 

17.1.1.    to obtain information and advice related to implementing the tax legislation and exercising taxpayers’ rights and performing their duties, as well as tax imposition, payment and reporting procedure, methodology and forms from the tax authority and state tax inspectors;

17.1.2.    to enjoy tax discounts and exemptions as provided by the tax legislation;

17.1.3.    to extend period for payment of taxes in accordance with legislation;

17.1.4.    to obtain refund or be entitled to deductions on overpaid taxes, to claim late penalty;

17.1.5.    to protect his legal rights and interests personally or through a legal representative or certified consultant; to be present during tax audits;

17.1.6.    to review acts, conclusions and other documents issued by the tax authority, if considered groundless or illegal, file a complaint in accordance with administrative and court procedures within 30 days after the review;

17.1.7.    to obtain or provide explanations on results of tax imposition, payment, monitoring and audits;

17.1.8.    to demand compliance with tax legislation from the tax administration and state tax inspectors, to be entitled to compensation for any loss and damage incurred due to illegal decisions and actions of the tax authority in accordance with regulations specified by the law;

17.1.9.    to file complaints on illegal operations and decisions of the tax authority and tax inspectors to their direct supervising authority, higher up authority or the court. Such filing of the complaint shall not relieve the taxpayer from paying taxes, fines and penalties imposed;

17.1.10.to obtain assistance and advice from legal tax consultants on exercising taxpayer’s rights and duties as provided by tax legislation;

17.1.11. other rights provided by the legislation.

 

 

Article 18.  Taxpayer Duties

 

18.1.           The taxpayer shall have the following duties:

 

18.1.1.        to accurately declare his taxable items and pay the taxes on time;

18.1.2.        to provide calculations, information and reports related to imposition and payment of taxes to the tax authority on time;

18.1.3.        to conduct bookkeeping and accounting in accordance with established procedures and accounting standards, and issue reports and statements on financial and economic activities;

18.1.4.        in case of violation of tax legislation, to fulfill requirements imposed by the tax authority on eliminating the violations;

18.1.5.        to sign inspection acts and conclusions of the tax authority in case of acceptance, if not, to provide an explanation in writing to the tax authority that carried out the inspection within 10 working days;

18.1.6.        to accurately impose and withhold taxes on labor wages and transferred income to be provided to others and pay to the budget on time;

18.1.7.        to notify the tax authority about acquiring a license to engage in legally permitted productions and services from a relevant state administrative body and have it registered within 10 days of obtaining the license in the taxpayer’s book;

18.1.8.        to use a cash register machine that complies with standards of Mongolia;

18.1.9.        to provide the tax authority with documents on transfer of taxable property and rights to others;

18.1.10.     to prevent others from using names, addresses, stamps, seals, the state registration certificate, checking and personal accounts, and signatures thereby providing opportunity to evade taxes;

18.1.11.     to notify the local tax authority each time a license acquired from relevant authorities is leased or sold to individuals and legal entities;

18.1.12.     to notify the tax authority every time a bank account is opened or closed;

18.1.13.     to provide financial and other documents necessary for tax audits as requested by the tax authority and state tax inspectors, to be subjected to tax audits;

18.1.14.     other duties as prescribed by the legislation.

 

 

 

CHAPTER FOUR

Mongolian National Tax Administration

 

Article 19.  Structure of the National Tax Administration

 

19.1.       The National Tax Administration shall be comprised of the General Department of National Taxation, tax agencies and offices of capital city, province, district; and tax branches of soum and state tax inspectors.

 

19.2.       The General Department of National Taxation may have branch units for state budget income, control, training, registration and information, and press.

 

19.3.       A Tax dispute settlement council (hereinafter the “dispute settlement council”) authorized to review and settle disputes arising between taxpayers and the tax authority shall work under the General Department of National Taxation, capital city and province tax offices. Operating procedure of the tax dispute settlement council shall be approved by the Government.

 

 

Article 20.  Symbol of the tax authority

 

20.1.       The tax authority shall have a symbol. Its design and procedure to use the symbol shall be approved by the Chief of the General Department of National Taxation.

 

 

Article 21.  Rules of the national tax authority

 

21.1.           The Government shall approve the rules of the national tax authority.

 

 

Article 22.  Course and duties of the national tax authority

 

22.1.       The State Tax Authority shall exercise the following functions:

 

22.1.1. To ensure implementation of tax legislation, provide taxpayer with information and advice, organize training and promotions;

22.1.2.        To supervise implementation of tax legislation;

22.1.3.        To build up tax revenue of state and local budgets.

 

Article 23.  Principle of Work of the National Tax Administration and State Tax Inspectors

23.1. The National Tax Administration and state tax inspectors shall respect the law, rights and legal interests of taxpayers, avoid being influenced by others. Lower level organizations shall be under direct governance of higher level organizations.

 

 

Article 24. Ensuring principles for the national tax administration and state tax inspectors to respect the law and avoid being influenced by others

 

24.1.       The national tax administration and state tax inspectors shall avoid being influenced by others and be governed only by the law and other legislative acts enacted in conformity with it when exercising their plenary power.

 

24.2.       Individuals, legal entities and officials shall be prohibited from being involved in operations of and exerting pressure on the tax administration and state tax inspectors when carrying out their official duties. The tax administration and tax inspectors shall file a complaint with a relevant organization for settlement on entities that violate this provision.

 

24.3.       Entities other than those authorized by the law shall be prohibited from making decisions related to plenary power of the tax administration and state tax inspectors.

 

24.4.       Entities other than those authorized by the law shall be prohibited from assuming responsibility on issues related to tax imposition, discounts and exemptions.

 

24.5.       Individuals and legal entities shall comply with methodology, instructions and regulations issues in conformity with the legislation by higher tax authorities in relation to ensuring complete implementation of the tax legislation nationwide.

 

 

Article 25.  Ensuring principles of respecting rights and legal interests of taxpayers

 

25.1.       The tax administration and state tax inspectors shall comply with article 14 of this law and ensure principles of respecting rights and legal interests of taxpayers.

 

 

Article 26.  Budget of the national tax administration

 

26.1.       Operations and investment cost of the national tax authority shall be financed from the budget.

 

 

Article 27.  Management of Tax Administration and Its Plenary Power

 

27.1.       The National Tax Administration shall have a unified and central management.

 

27.2.       The General Department of National Taxation shall work under supervision of a Cabinet Member in charge of financial matters, Tax administration and taxation department of province and capital city under the General Department of National Taxation, and district tax departments and soum tax inspectors under province and capital city tax administration and department;

 

27.3.       The national tax authority shall provide operations of all levels of the tax administration with professional and methodological management and funds, and oversee their operations.

 

27.4.       The Chief of the province and capital city tax departments shall be appointed and dismissed by the Chief of the General Department of National Taxation, Chiefs of district tax departments by the Chief of the capital city tax department based on consensus to be reached with the Governor of the given level.

 

27.5.       The Chief of the General Department of National Taxation and province, capital city, district tax departments shall be selected and appointed in accordance with clause 17.1 of the State Service Law from civil servants who have a financial, economic or accounting profession, have worked at least three years for the tax department and have a state inspector’s right.

 

27.6.       The Chief of the General Department of National Taxation shall be the general state tax inspector and exercise the following plenary rights in addition to plenary rights of state tax inspectors specified in article 29 of this law:

 

27.6.1.        To provide implementation of plenary power of the National Tax Authority and state tax inspectors with organizational management and funds, to oversee their operations;

27.6.2.        To enact regulations, instructions and methodologies for public compliance to implement this law and other tax legislation, issue recommendations within scope of rights provided by this law and other tax legislation;

27.6.3.        To provide, suspend and void the state tax inspector’s right, to impose disciplinary fines;

27.6.4.        To issue resolutions within scope of plenary power granted by the tax legislation;

27.6.5.        To participate in drafting tax legislation, to develop, present and introduce proposals on methods, forms and possibilities for the tax department to implement them to the Government and the Parliament;

27.6.6.        To provide proposals on international treaties on preventing tax evasion and avoiding double taxation on income and property;

27.6.7.        To review, amend and void acts, conclusions and other decisions made by state tax inspectors within scope of law;

27.6.8.        To review and confirm, or modify and void decisions made by the Tax dispute settlement council under the General Department of National Taxation;

27.6.9.        To appoint, dismiss, transfer, shift, award and provide incentives to employees of the national tax administration;

27.6.10.     To have the right of disposal of the budget and funds of the national tax administration.

 

 

Article 28.  Plenary rights of the State Tax Administration

 

28.1.           The State Tax Administration shall have the following plenary rights:

 

28.1.1.        To organize work to ensure full compliance with the tax legislation on territory of Mongolia;

28.1.2.        To serve taxpayers by providing them with methodologies, instructions, information and advice to comply with the tax legislation;

28.1.3.        To organize work of ensuring whether taxpayers accurately and completely report their legally payable tax deductions and make timely payments;

28.1.4.        To provide tax discounts and exemptions to taxpayers in accordance with the tax legislation;

28.1.5.        To collect independent data on taxpayers, establish a database, and to use it for tax audits and collection activities;

28.1.6.        To impose taxes in accordance with the law on taxpayers whose income and expenditures are impossible to determine due to failure to maintain bookkeeping and accounting registers;

28.1.7.        To temporarily suspend withdrawals from checking accounts of legal entities who failed to pay their taxes on time until such taxes are paid;

28.1.8.        To carry out tax debt settlements and tax collection activities in accordance with regulations stipulated in this law;

28.1.9.        To roll over overpaid taxes to the next month, quarter, year or refund within 10 days of the payment if the taxpayer requests so;

28.1.10.     To impose legal liability on taxpayers who have evaded payment of taxes, fines and penalties, failed to provide tax information, reports and other documents necessary for tax audits on time, and take measures to eliminate violations detected in the process of tax audits;

28.1.11.     To modify or void decisions made by state tax inspectors and lower level tax administration if considered groundless;

28.1.12.     To organize work of preparing tax consultants, provide them with appropriate rights and work assistance, and cooperate with them, in accordance with the legislation;

28.1.13.     To obtain information, research and other relevant documents necessary to maintain tax control from individuals and legal entities free of charge;

28.1.14.     To provide electronic services;

28.1.15.     To carry out electronic audits.

 

28.2.           The tax administration shall file claims with the court on the following issues:

 

28.2.1.        To temporarily suspend economic activities of taxpayers who have repeatedly and seriously breached the tax legislation until such violations are eliminated;

28.2.2.        To sequestrate taxpayers’ income earned by engaging in production and services prohibited by the law;

28.2.3.        To sequestrate taxpayers’ income earned by engaging in production and services allowed by the law but without holding appropriate permits;

28.2.4.        To sequestrate taxpayers’ income earned by engaging in illegal actions or under invalid contracts and agreements;

28.2.5.        Taxpayers who have obstructed performance of duties of state tax inspectors, made protests, discriminated in relation to their duties, infringed upon their health and lives and caused damages;

28.2.6.        And other issues provided in the legislation.

 

 

Article 29.  Plenary power of state tax inspectors

 

29.1.           State tax inspectors shall exercise the following plenary powers:

 

29.1.1.To inspect tax imposition, taxes payable, accounting reports, journals, drafts and other financial documents, to obtain explanations and clarifications, to establish violations and write up acts, conclusions and other relative documents;

29.1.2.        To obtain copies of certificates and documents, and bank transaction statements necessary for tax audits from economic entities, organizations, individuals and financial organizations that correspond with taxpayers free of charge;

29.1.3.        To temporarily cease, seal documents and property from the taxpayer that prove concealment of taxable items, to collateralize property for the purpose of tax debt settlement;

29.1.4.        To access the taxpayer’s warehouse and quarters (regardless of the location) used to earn income, or where taxable items, accounting and other documents are maintained that prove the above, to conduct an examination, counting, take official pictures, and an inspection, if necessary;

29.1.5.        Tax withholding individuals and legal entities shall impose and withhold taxes from labor wages paid to others and transferred income; if such withholdings were not made and paid to the budget, the deductions shall be paid by the entity itself from its own funds;

29.1.6.        To impose liability specified in articles 74, 75 of this law on taxpayers who have violated the tax legislation;

29.1.7.        To oversee whether taxpayers carry out their accounting and bookkeeping, issue reports, define their income and taxes and compile documents in accordance with the legislation; to provide them with professional and methodological assistance;

29.1.8.        To oversee tax imposition and payment procedures, to strictly comply with the tax legislation of Mongolia and other legislation when collecting taxes;

29.1.9.        To strictly adhere to ethics rules of public servants and state tax inspectors;

29.1.10.     To collect and pay to the budget taxes, payments, fees, penalties and fines on times specified by the law;

29.1.11.     To oversee implementation of tax audit acts, conclusions and other decisions;

29.1.12.     To respect taxpayers’ legal interests, to provide advice and assistance within the framework of law on tax imposition and payments;

29.1.13.     To maintain confidentiality of taxpayers established by the law.

 

 

Article 30.  Prohibitions of state tax inspectors

 

30.1.       The state tax inspectors shall be prohibited from the following activities besides prohibitions prescribed to public servants and specified in the Law on Public Service:

 

30.1.1.            To conduct tax audits without a directive and assignment;

30.1.2.            To print and use without authorization state tax inspector’s acts, conclusions and other documents and forms, to use invalid or fake forms;

30.1.3.            To prematurely introduce to the taxpayer one’s notes on state tax inspector’s acts, conclusions, reporting sheets and other documents without finalizing in an official form, and force the taxpayer into confirming it;

30.1.4.            To make changes to or modify acts, conclusions, reporting sheets and other documents that have been signed and certified;

30.1.5.            To distort the principle of respecting the law and avoiding influence of others;

30.1.6.            To disrespect rights and legal interests of taxpayers;

30.1.7.            To violate ethics rules of state tax inspectors;

30.1.8.            To provide information pertinent to confidentiality of the taxpayer acquired in the process of tax audits to entities other than those specified in article 14 of this law, to use it for personal purposes:

30.1.9.            To conduct examinations and audits without obtaining the state tax inspector’s right or extending the right in accordance with the proper procedure;

30.1.10.         To neglect to ensure implementation of acts, conclusions and other documents, to weaken supervision thereof;

30.1.11.         To conduct the taxpayers’ accounting, to issue tax and financial statements, to carry out audits;

30.1.12.         To provide opportunities and conditions for taxpayers to evade taxes, to recommend, persuade, force and demand to violate the legislation;

30.1.13.         To fail to register oral and written opinions, requests, complaints and information submitted by taxpayers in the general and confidential log of the tax administration’s operations, to examine and resolve proposals, requests, complaints and information not registered as such;

30.1.14.         In case of receiving statements, complaints and information on violation of the tax legislation, concealing and evading taxes, to conduct examinations or to be in charge of organizing examinations and audits.

 

 

Article 31.  Integrated database of tax registration and information

 

31.1.       The national tax authority shall have an integrated database of tax registration and information.

 

31.2.       The integrated database of tax registration and information shall have the following purposes:

 

31.2.1.    To oversee tax imposition, payment and collection; to provide with prompt management;

31.2.2.        To efficiently organize tax audits;

31.2.3.        To ensure full nationwide compliance with the tax legislation;

31.2.4.        To ensure openness and transparency of tax administration operations;

31.2.5.        To ensure rapid service to taxpayers.

 

31.3.       The tax administration shall have the right to collect independent information necessary for the integrated tax registration and information database specified in 31.1 of this law in compliance with the legislation.

 

 

Article 32.  Procedure for the tax administration and state tax inspectors to collect information and documents and conduct audits

 

32.1.       The tax administration and state tax inspectors shall adhere to the following procedure when conducting their operations, defining taxpayers’ tax duties, collecting information and documents related to tax collection, and conducting examinations and audits:

 

32.1.1.    To present the state tax inspector’s ID, general and specific work directive and the assignment given by the tax administration to conduct the tax audit, to explain the purpose of the inspection;

 

32.1.2.            To execute notes and have them signed in presence of independent witnesses when temporarily confiscating relevant documents and materials;

32.1.3.            To take photographs and make video recording of facts qualifying as evidence;

32.1.4.            To obtain explanations and statements in writing, execute notes when taking interviews and inquiries, have them signed by relevant entities.

 

32.2.       If technical equipment of others is used to make copies of necessary information and documents, payment for such use shall be paid based on current market rate or mutually negotiated price.

 

32.3.       Chief of the unit in charge of the tax administration’s audits shall oversee daily operations of the state tax inspector conducting the tax audit and provide with professional and methodological assistance.

 

 

Article 33.  Documents to be issued by the tax administration and state tax inspectors

 

33.1.       The tax administration and state tax inspectors shall execute statements, acts, demands, notices, payment forms, conclusions, agreements and operations records (hereinafter the “records”) when carrying out their duties in relation to overseeing tax imposition, payment and collection.

 

33.2.       The tax administration and state tax inspectors shall execute the documents specified in section 33.1 of this law in accordance with the following grounds and procedure. It is the taxpayers’ duty to fulfill requirements specified in them:

 

33.2.1.            The tax administration and state tax inspectors shall execute a statement when summoning taxpayers and other entities within plenary power specified in articles 28, 29 of this law. The statement shall have family name, parents name and given name and signature of the Chief of the tax administration or the state tax inspector, deadline to fulfill the requirements and the date of the statement issuance and delivery;

 

33.2.2.            The tax administration and state tax inspectors shall execute an act when imposing liability specified in article 74 of this law, sealing property and determining taxes to be imposed on taxpayers in accordance with the tax legislation. The act shall have family name, parents name and given name and signature of the Chief of the tax administration or the state tax inspector, notes on the violation, grounds for the decision, and the date of the act issuance and delivery;

 

33.2.3.            The tax administration and state tax inspectors shall execute a demand statement for the purpose of having causes and conditions that have led to violation of the tax legislation eliminated. The demand shall have family name, parents name and given name and signature of the Chief of the tax administration or the state tax inspector, notes on the violation, deadline to eliminate causes and conditions that have led to the violation and to provide a reply, and the date of the demand issuance and delivery;

 

33.2.4.            A notice shall be executed to have tax deductions paid that were imposed using an indirect method or that the taxpayer failed to pay on time. If the notice is to be delivered to the taxpayer, article 54 of this law, and if the notice is to be delivered to the taxpayer’s corresponding bank, article 63 of this law shall be complied with respectively when executing the notice.

 

33.2.5.            If a tax debt is to be paid from a salary and other income, a payment form shall be executed and delivered to the legal entity that provides the income to the taxpayer. The payment form shall have name of the taxpayer, type and amount of tax to be paid, the tax administration to receive the tax debt, name of the bank and account number, name and address of the legal entity to pay the tax debt in the name of the taxpayer, family name, parents name and given name and signature of the Chief of the tax administration or the state tax inspector, address of the taxpayer, amount of the tax debt to be paid, date of issuance and delivery of the payment form, and deadline to provide a reply;

 

33.2.6.            The tax administration shall execute a conclusion to initiate a criminal case proceeding against entities that have seriously violated the tax legislation, concealed significant amount of taxable income or tried to evade payment of taxes through other actions. The conclusion shall have notes on the violation that qualify for initiation of a criminal case proceeding, relevant facts, family name, parents name and given name and signature of the Chief of the tax administration or the state tax inspector, statement of the entity pertinent to the case, and the date committing and involved entities were introduced to the conclusion.

 

33.2.7.            The tax administration and state tax inspectors shall conclude an agreement in accordance with the Civil Code when taking property owned by the taxpayer as collateral for the purpose of settling tax debts;

 

33.2.8.            State tax inspectors shall execute notes when conducting audits at taxpayers’ accommodations and warehouses, carrying out counting, taking official pictures, sealing or taking property as collateral, and obtaining explanations, statements, inquiries and interviews from taxpayers within their plenary power. The notes shall have family name, parents name and given name of the state tax inspector, address of the taxpayer, the date, and signatures of people who were present when executing the notes.

 

33.3.       Documents specified in article 33.1 of this law shall be deemed delivered to the taxpayer upon personal delivery or delivering by certified mail to their address of residence or work. The address of the taxpayer registered with relevant registration organization shall be his current address.

 

Article 34. Grounds for executing acts and conclusions

 

34.1.       State tax inspectors shall execute acts based on grounds specified in articles 47.1, 48.1, 67, 74 of this law and conclusions based on grounds specified in 33.2.6 of this law. The acts and conclusions shall comprise of recording and establishing parts.

 

34.2.       Acts and conclusions (hereinafter the “acts and conclusions”) executed by state tax inspectors shall become valid upon signatures of the state tax inspector conducting the inspection, the taxpayer and signature of the Chief of the department, unit in charge of the tax administration audits in confirmation of his review.

 

34.3.       If taxpayers refuse to sign acts and conclusions, they shall be deemed valid from the day they were handed to the taxpayer in accordance with article 18.1.5 of this law regardless of whether the taxpayer has provided a statement. The state tax inspector shall make a note on handing the acts and conclusions to the taxpayer.

 

34.4.       The acts and conclusions shall have individual registration numbers.

 

34.5.       State tax inspectors shall execute acts and conclusions in three copies and attach the first copy to inspection documents, provide second copy to the taxpayer and file the third copy in taxpayer’s personal file.

 

 

Article 35.  Ensuring implementation of acts and conclusions

 

35.1.       The tax administration shall oversee and ensure implementation of state tax inspectors’ acts and conclusions.

 

35.2.       The tax administration and state tax inspectors shall file a claim with the court in accordance with the legislation to have acts and conclusions fulfilled, implementation of which has become impossible as specified procedure in stipulated in articles 63, 64 of this law.

 

35.3.       Invalidation of the conclusion specified in 33.2.6 by authorized organizations and officials shall not become grounds to relieve the entity at fault from administrative liability.

 

 

Article 36.  Modifying and invalidating acts and conclusions

 

36.1.       State tax inspectors’ acts and conclusions shall be amended or void based on the following grounds upon decision of the department Chief in charge of the given tax:

 

36.1.1.        Based on taxpayer’s complaint;

36.1.2.        Chief of the unit in direct supervision of the tax inspector had proposed to modify or void the act or conclusion executed by the tax inspector;

36.1.3.        Based on a decision made by the tax dispute settlement council on amending or voiding the act or conclusion.

 

36.2.       The Chief of the tax administration may appoint a working group to issue a  conclusion when issuing the decision specified in article 36.1 of this law.

 

 

Article 37.  Titles of state tax inspectors

 

37.1.           State tax inspectors may be provided the following titles:

 

37.1.1.                Authentic tax advisor;

37.1.2.                Certified tax advisor;

37.1.3.                Tax advisor.

 

37.2.           The Government member in charge of financial matters shall endorse the procedure for providing titles to state tax inspectors.

 

 

Article 38.  Salaries and wages of state tax inspectors

 

38.1.       State tax inspectors shall receive salaries and wages from the state.

 

38.2.       Salaries and wages of state tax inspectors shall comprise of job salary, performance bonus, and supplements of public service duration, ranks and titles and scientific degrees.

 

38.3.       The amount of performance bonus to be provided on a monthly basis to state tax inspectors shall not exceed amount of their monthly job salary.

 

38.4.       The Government shall endorse the procedure to provide the performance bonus specified in article 38.2 of this law.

 

 

Article 39. Guarantee of rights of state tax inspectors

 

39.1.       State tax inspectors shall use uniforms and distinguishing badges and their cost shall be financed by the state budget.

 

39.2.       Chief of the General department of national taxation shall approve the regulations for design and use of state tax inspectors’ uniforms and badges as well as their service life.

 

39.3.       Other organizations and individuals shall be prohibited from using uniforms and badges of the same design as the state tax inspectors’.

 

39.4.       If state tax inspectors suffer from temporary or permanent disability or death caused by others when performing their official duties, they or their families shall be provided the following irrevocable assistance and salary balances of the position.

 

39.4.1.        in case of temporary disability, allowance for duration of the hospital stay and salary balance of the position;

39.4.2.        in case of permanent disability, disability allowance and salary balance of the position;

39.4.3.        in case of death, one time assistance equal to three years’ salary of the victim’s position to his family.

 

 

Article 40.  Dismissal from tax service

 

40.1.       State tax inspectors shall be dismissed from the tax service based on the following grounds;

 

40.1.1.        repetitive discipline violations;

40.1.2.        serious violation of the legislation and ethical boundaries of the state tax inspector;

40.1.3.        proven to have committed a crime;

40.1.4.        abandoned citizenship of Mongolia.

 

 

Article 41.  Collector

 

41.1.       Tax officers working as apprentices for probation period of one year before obtaining the right of the state tax inspector shall be called as collectors.

 

41.2.       Collectors shall not have the right to independently conduct tax audits.

 

 

Article 42.  Dispute settlement council

 

42.1.       The Dispute settlement council shall discuss disputes arising between the tax administration and taxpayers related to tax inspectors’ tax acts and conclusions based on taxpayers’ complaints only.

 

42.2.       The Dispute settlement council shall consist of the Chief, secretary and members.

 

42.3.       A Government member in charge of financial matters shall appoint staff of the Dispute settlement council under the national tax authority to have 11 employees including the Chief and the secretary; and Chief of the national tax authority shall appoint staff of the dispute settlement council under province, capital city tax departments to have 7-9 employees.

 

42.4.       Composition of the tax dispute settlement council shall include representations of state and local administrative body in charge of tax and legal matters, the tax administration and non-governmental organizations. Their appointment shall be agreed with management of their respective organizations.

 

42.5.       The Chief and members of the Dispute settlement council shall be individuals of accounting, financial, economic and legal professions. At least 60 percent of the staff shall be trained as state tax inspectors.

 

42.6.       The Dispute settlement council shall convene with at least two thirds of the members present, and resolve issues based on regular majority voting.

 

42.7.       The Dispute settlement council shall make one of the following decisions: modifying, invalidating or keeping unchanged acts and conclusions of state tax inspectors. Its decision shall be in a form of a settlement.

 

42.8.       The settlement of the tax dispute settlement council shall be certified by a resolution of the Chief of the relevant level tax administration. If the Chief of the tax administration considers it groundless to certify it, he shall provide a detailed statement specifying the reason(s) and return along with the resolution to the Dispute settlement council.

 

42.9.       The Dispute settlement council shall consider the statement of the Chief of the tax administration specified in 42.8 of this law at its meeting and modify the resolution if it accepts it. If not accepted, the matter shall be presented to the higher level tax administration for settlement.

 

42.10.     The Dispute settlement council shall have the right to issue recommendations on how to eliminate causes and conditions of disputes, as well as to prevent violations of the tax legislation.

 

 

 

CHAPTER FIVE

Tax imposition, payment and reporting

 

Article 43.  Tax imposition, payment and reporting procedure

 

43.1.       Taxpayers shall independently determine their tax deductions payable in accordance with the law based on relevant documents, reflect them in their tax reports and pay in both cash and non-cash forms.

 

43.2.       Tax imposition and payment procedure other than specified in 43.1 of this law may be established by the law of the given tax type.

 

43.3.       Tax reports may be submitted in the form of electronic tax documents and the relevant procedure shall be approved by the Chief of the National tax authority.

 

43.4.       Tax reports submitted by taxpayers (including electronic tax reports) shall be received, registered and resolved in accordance with the procedure of conducting state documents.

 

43.5.       Time to submit tax reports and pay taxes shall be established by the law of the given tax type. The deadline to report and pay taxes shall be the same.

 

43.6.       If the deadline to report and pay taxes coincides with weekends and public holidays, taxes shall be reported and paid on the previous working day.

 

43.7.       Entities obligated by the law to impose, deduct and pay taxes to the budget shall not get paid for fulfilling this duty.

 

43.8.       Taxes not paid on time specified by the tax law, taxes imposed in arrears, late fees and penalties shall be paid in accordance with the procedure specified in this law and the law of the given tax type.

 

43.9.       Taxpayers shall pay indirect taxes in advance without waiting for results of the given operations.

 

43.10.     The law of the given tax type shall be determined when to establish the date of tax imposition: on the day of invoicing taxable items, the day the invoice was written or the day it was paid.

 

 

Article 44.  Compiling, registering and maintaining documents related to taxes

 

44.1.       Taxpayers shall compile documents to determine amount of taxes and taxable items in compliance with the legislation; legal entities shall maintain accounting and individuals-regular registration.

 

44.2.       If documents specified in 44.1 of this law are executed in a foreign language, the taxpayer shall be obligated to submit them translated into Mongolian. The taxpayer shall be responsible for costs associated with such translation.

 

44.3.       Taxpayers and entities obligated to compile their documents and conduct bookkeeping shall have the duty to keep such documents and registrations in Mongolia until the tax payment and settlement time runs out.

 

 

Article 45.  Executing and submitting tax reports

 

45.1.       Taxpayers shall execute tax reports in accordance with instructions, design and time specified by the law, and submit to the local tax administration.

 

45.2.       Taxpayers eligible for tax discounts and exemptions in accordance with the legislation shall not be relieved from the duty to submit tax reports. The tax reports shall be the main documents to provide taxpayers with tax discounts and exemptions.

 

45.3.       Tax reports shall be signed by the legal entity’s authorized officials and the taxpayer himself or his legal representative.

 

45.4.       Entities who have prepared or participated as such in preparation of taxpayers’ tax reports shall sign the tax reports. If a number of officials participate in issuing the tax report in accordance with their duty, the tax report shall be signed by the chief accountant.

 

45.5.       Entities who have transferred taxable items to others shall be obligated to provide a document on such transfer to the entity acquiring the taxable items every time and to the tax administration whenever requested.

 

 

Article 46.  Receiving tax reports

 

46.1.       The tax administration shall oversee whether taxpayers are filing their tax reports on time specified by the law and paying their taxes.

 

46.2.       The tax administration may take measures to supervise registration of, regularize and stabilize tax report submissions.

 

46.3.       The tax administration and state tax inspectors shall ensure the tax reports submitted by taxpayers meet the following requirements:

 

46.3.1.        Whether legal entities accurately filed their tax reports based on their accounting and individuals based on their income and tax registration books;

46.3.2.        Whether tax reports are filled in on correct forms in accordance with instructions without any errors, signed by taxpayers and other relevant entities, and made official with seals and stamps;

46.3.3.        To ensure the date of tax report submission is recorded in the report; if submitted late, appropriate note shall be made.

 

46.4.       The tax administration and state tax inspectors shall examine the following items when receiving tax reports:

 

46.4.1.        Whether accounting and tax report data match;

46.4.2.        Whether numeric data within the tax report match, whether there are any calculation errors;

46.4.3.        Whether tax discounts and exemptions in the report have been estimated and reported in accordance with the legislation;

46.4.4.        Whether taxes defined in the report have been paid on time;

46.4.5.        Whether tax debts and overpaid amounts reflected in the report coincide with registration of the tax administration;

46.4.6.        Whether there is collateral information related to the tax report of the given taxpayer in the integrated registration and information database of the tax administration.

 

46.5.       The following measures shall be taken to eliminate errors detected when receiving tax reports:

 

46.5.1.        To have the taxpayer correct errors in the tax report, add missing items, make the report to comply with the law, and correct numeric calculation errors;

46.5.2.        To have the taxpayer pay the tax impositions and tax debts defined in the tax report;

46.5.3.        To write a conclusion to conduct a tax audit and introduce to the department Chief, if it is suspected that the taxpayer has incorrectly reported his tax deductions, refused to accept requirements of the state tax inspector to correct the errors detected in relation to estimating one’s tax deductions or failed to maintain accounting.

 

 

 

CHAPTER SIX

Tax Audits

 

Article 47.  Tax audits

 

47.1.       Taxpayers shall fulfill their duties under the tax legislation of Mongolia by accurately reporting their payable taxes and paying them on time, which shall be verified by the tax administration and state tax inspectors.

 

47.2.       The National tax administration shall conduct tax audits.

 

47.3.       The tax administration and state tax inspectors shall carry out the following inspection activities within their authority in compliance with the purpose of eliminating violations and assisting taxpayers with exercising of their rights and performance of their duties:

 

47.3.1.        To facilitate conditions for taxpayers to implement the tax legislation by independently and accurately defining their taxes, to establish whether taxpayers regularly maintain accounting, issue their tax reports on time and pay their taxes;

47.3.2.        To check whether taxes reported by taxpayers in their tax reports are complete;

47.3.3.        If taxpayers fail to maintain proper accounting or fail to file their tax reports, to define their taxes and have them pay the taxes.

 

47.4.       The tax administration and state tax inspectors shall have the right to inspect taxpayers’ performance of duties whenever deemed necessary in all forms allowed by the law, compliant with international standards such as planned, unexpected, full, partial, individual or public, in accordance with requirements to save on tax collection costs, to be efficient, to avoid disrupting normal flow of taxpayers’ operations and cause as little disturbance as possible.

 

47.5.       Unless necessary, a 10 days’ advance notice shall be provided to taxpayers to notify of tax audits.

 

47.6.       In order to ensure steady tax income flow, Chief of the National tax administration shall establish jurisdiction of tax audits by amount of income contributed by taxpayers to the state and local budgets.

 

47.7.       The tax administration shall organize and assign audits in compliance with the purpose of preventing taking of bribes and conflicts of ethical interests taking into consideration professional skill level of and work experience of state tax inspectors.

 

47.8.       The procedure to receive, review and resolve applications, complaints and information on violation of the tax legislation shall be approved and enforced by the Chief of the General department of National taxation.

 

 

Article 48.  Indirect method of determining tax imposition

 

48.1.       The tax administration shall apply the following indirect methods of determining tax deductions of taxpayers if it is established that they have used unreal prices in engaging in certain operations, failed to properly or fully maintain reports and accounting, or did not issue any reports:

 

48.1.1.      actual price method;

48.1.2.      standard price method.

 

48.2.       The “actual price method” shall mean determining taxes to be imposed using method of price comparisons and calculation methods that can be utilized under regular market conditions if prices used in production, trade and financial transactions concluded between mutually related entities are different from prices used between unrelated entities.

 

48.3.       If prices, payments and fees (hereinafter the “price”) used in operations such as engaging in cooperative production, providing technical services, sending human resources, purchase and sales concluded by taxpayers with mutually related entities abroad and in Mongolia are higher or lower than actual prices, the actual price method shall be used to determine tax deductions.

 

48.4.       “Mutually related entities” shall mean entities authorized to directly and indirectly participate in management, control and property rights of any foreign and Mongolian legal entities.

 

48.5.       The “standard price method” shall mean determining taxes to be imposed based on operations, income, spending and other documents of a taxpayer in local area of capacity and conditions similar to the taxpayer, if there is not one in local area, then a number of taxpayers in nearby areas.

 

48.6.       The Government member in charge of financial matters shall approve the methodology of direct and indirect methods to determine taxes to be imposed.

 

48.7.       The taxpayer shall be obligated to provide materials necessary for determining taxes to be imposed using the indirect method to the tax administration.

 

 

Article 49.  Accessing places and warehouses

 

49.1.       State tax inspectors shall access cellars, warehouses, offices and any other quarters used for production and services, access to which is not prohibited by the law, or used by the taxpayer to store taxable items, information, research and other documents related to tax, or used for the purpose of earning income in accordance with provision 29.1.4 of this law, and document in photographs, carry out audits and counts, temporarily cease documents and property for review and inspection.

 

49.2.       Activities specified in 49.1 of this law shall be carried out based on official assignment and directive approved by the chief of the local tax administration which clearly specifies the places and warehouses to be accessed.

 

49.3.       State tax inspectors shall access places and warehouses upon presenting to the taxpayer or his legal representative their state tax inspectors’ identification, the directive and the official assignment of the tax administration to conduct the inspection and count.

 

49.4.       It shall be prohibited to carry out activities specified in 49.1 of this law at foreign diplomatic missions and consulates, offices of international organizations, and homes of officials of diplomatic standing.

 

 

Article 50.  Procedure to conduct audits

 

50.1.       State tax inspectors shall adhere to the following procedure when conducting audits in accordance with provision 29.1.4 of this law:

 

50.1.1.    To have presence of an independent witness when conducting audits. The independent witness shall have reached 18 years of age, have full legal capability, free of any private interests in the activity, and free of any subordinate or superior relations with the taxpayer, the tax administration or the state tax inspector conducting the inspection;

 

50.1.2.        To have presence of the owner or his legal representative of the property being subjected to the inspection, if not possible, a representative of the local administrative body;

50.1.3.        To execute notes on the inspection and have them sign by people who have participated or witnessed the inspection. If they refuse to sign, to provide an opportunity to explain and attach the explanation to the notes.

 

50.2.       The tax administration and state tax inspectors shall have the right to conduct inspections regardless ownership and possession status of the items to be subjected to the inspection.

 

 

Article 51.  Procedure to conduct counts

 

51.1.       State tax inspectors shall adhere to the following procedure when conducting counts in accordance with provision 29.1.4 of this law:

 

51.1.1.        To conduct counting of goods, property and cash in the presence of the tax taxpayer or his legal representative, accountant, or a representative of the local administrative body, and execute registration and notes of the count;

 

51.1.2.        The registration and notes of the count shall be signed by the state tax inspector who conducted the count, and people who have witnessed the count. If they refuse to sign, to provide an opportunity to explain and attach the explanation to the notes.

 

 

Article 52.  Procedure to do picture documenting

 

52.1.       State tax inspectors shall adhere to the following procedure when doing picture documenting in accordance with provision 29.1.4 of this law:

 

52.1.1.        To carry out picture documenting for the purpose of defining taxes payable by the tax inspector and determining volume and cost of production and services. Picture documenting shall be carried out with or without notifying the taxpayer in advance. If an advance notice to carry out picture documenting has been provided to the taxpayer, to have the taxpayer present during the documentation and if such notice has not been provided, to have an independent witness present;

52.1.2.        To have professionals participate in the picture documenting and use necessary measuring devices;

52.1.3.        State tax inspectors shall provide a conclusion on the picture documenting and execute notes. The notes shall be signed by people who have witnessed the picture documenting. If they refuse to sign, to provide an opportunity to explain and attach the explanation to the notes.

 

 

CHAPTER SEVEN

Tax Registration and Debt Settlement

 

Article 53.  Tax registration

 

53.1.       The tax administration shall maintain accounting on taxes, fines and penalties in accordance with the legislation.

 

53.2.       Tax accounting should fully reflect tax deductions, discounts, exemptions, fines, penalties payable by taxpayers, their payment, collection and debts based on preliminary documents.

 

53.3.       The tax administration shall register income from taxes, fines and penalties and have a checking account for the purpose of refunding VAT and overpaid taxes in accordance with the law.

 

53.4.       The bank shall conduct payment order transactions of the tax administration on refunding VAT and other overpaid taxes from income accumulated in the checking account of the tax administration on the given day, and transfer the balance to the state fund account within the same day.

 

53.5.       The Government member in charge of financial matters shall approve and enforce the procedure to maintain tax accounting and the tax income registration account.

 

 

Article 54.  Delivering notices

 

54.1.       Taxpayers shall be delivered notices to pay taxes determined by the tax administration in accordance with the procedure specified in Article 48 of this law and taxes that the taxpayer failed to pay on time. The notice shall include the following:

 

54.1.1.        Taxpayer’s family name, parents’ names, given name;

54.1.2.        Taxpayers’ registration number;

54.1.3.        Date of issuance of the notice;

54.1.4.        Taxable items;

54.1.5.        Amount of taxes payable;

54.1.6.        Requirement to pay the taxes within 10 business days of delivering the notice;

54.1.7.        Place to pay the taxes;

54.1.8.        Basis for estimating the taxes;

54.1.9.        And other requirements deemed necessary by the tax administration.

 

54.2.       In case of possible failure to pay the imposed taxes, the chief of the tax administration may establish a time period shorter than that specified in 54.1.6 of this law.

 

 

Article 55.  Tax debts

 

55.1.       Taxes mentioned below that have not been paid on time specified by the law, fines and penalties imposed thereon shall be considered as tax debts:

 

55.1.1.        Tax debts reported in the taxpayer’s report, fines imposed on them;

55.1.2.        Taxes defined by the tax administration in accordance with article 48 of this law, penalties and fines imposed thereon;

55.1.3.        Taxes established by tax administration audits, fines and penalties imposed thereon.

 

 

Article 56.  Order to settle tax debts

 

56.1.       Taxes, fines and penalties (hereinafter the “tax debt”) failed to have been paid on time specified by the legislation shall be settled in the following order:

 

56.1.1.        Fines imposed on the taxes;

56.1.2.        Penalties;

56.1.3.        Main tax debt.

 

56.2.       If the taxpayer did not specify exact time period and type of tax being paid with the current tax payment, the tax administration shall specifically determine order of the tax debt payment.

 

 

Article 57.  Deadline to settle tax debts, extending thereof

 

57.1.       The tax administration and state tax inspectors shall establish the deadline to settle tax debts as follows:

 

57.1.1.        Taxpayers shall settle tax debts imposed in accordance with this law or incomplete payments within up to 15 days of delivering the imposition act;

57.1.2.        Taxes in arrears, fines and penalties imposed thereon detected during audits within up to 15 days of delivering the act.

 

57.2.       If taxpayers cannot pay their tax debt on time specified in 54.1.6, 54.2, 57.1 of this law due to valid reasons, the deadline may be extended once up to 60 days based on a written request of the taxpayer and settlement of the chief of the tax inspector.

 

57.3.       Establishment and extension of the deadline to settle tax debts in accordance with procedures specified in 57.1 and 57.2 of this law shall not become grounds for dismissing imposition of tax fines.

 

 

Article 58.  Tax deductions and refunds

 

58.1.       In accordance with 17.1.4 of this law, the tax administration shall resolve taxes overpaid by taxpayers in compliance with the following procedure:

 

58.1.1.        To account for other taxes payable during the same time period;

58.1.2.        To keep for taxes payable in the next period, with permission of the taxpayer;

58.1.3.        To refund.

 

58.2.       If keeping the overpaid taxes, the tax administration shall notify the taxpayer.

 

 

Article 59.  Groundless and excess payment of monetary capital due to fault of the tax administration and state tax inspectors

 

59.1.       The following items shall be considered as capital paid groundlessly and in excess by taxpayers due to erroneous activities of the tax administration and state tax inspectors:

 

59.1.1.        Total taxes, fines and penalties to be fully or partially refunded due to invalidation or modification of acts by state tax inspectors;