Tax relief expands from 2027

In 2026 the State Great Khural amended a package of tax laws, including the General Tax Law and the Personal Income Tax Law; the laws were published in issue No. 28 of the 2026 official gazette “Töriin Medeelel”. Most changes take effect on 1 January 2027.

Personal income tax

• 0% band. Tax on annual income up to MNT 9,504,000 (about MNT 792,000 a month) is fully relieved.
• 1% band for business income. For relevant business income, a 1% rate applies to annual income between MNT 9,504,000 and MNT 24,000,000.
• Tax on total business income. Individuals with annual taxable income up to MNT 1 billion may elect to be taxed on total business income.
• Sale of a first home. Income from selling the first home a citizen owned and lived in is exempt, except homes in state tourism zones and specially protected areas.

Taxpayer protections (General Tax Law)

• When collecting tax debt from a bank account, no more than 70% of incoming funds may be taken; 30% stays in the account.
• No late-payment interest accrues during a tax audit, and total interest is capped at 50% of the unpaid tax.
• Penalties linked to a disputed assessment are not enforced until the dispute is finally resolved.

Companies, VAT and excise tax

• Companies with taxable income up to MNT 2.5 billion that meet the criteria receive a 90% corporate income tax reduction; some sectors are excluded.
• Eligible taxpayers may defer VAT payment by 1 month on a first request and up to 2 months on a later one.
• Excise tax on luxury cars. For imported passenger cars, an additional 33% excise tax applies to the part of the customs value above MNT 360,000,000, on top of the rate set in Article 6.3 of the Excise Tax Law.

This article is for general information only and is not legal advice. Please contact our lawyers about your specific situation.