Senior inspector of the Mongolian Taxation Agency P. Undarmaa was invited as a guest of the regular morning meeting and gave understanding and information on the package laws on taxation, which has implemented since January 2020, to staff and employees of legal and financial departments of the member organizations. 17 people participated in the meeting.
The State Great Khural adopted General law on Taxation, law on Corporate income tax, renewed composition of the draft package law on Personal income in 2019. In connection with adoption of these package laws amendments were made into 23 laws, 3 laws on procedure on compliance and 3 laws to cancel were adopted and made decision to implement totally 32 laws. Concerning to adoption of these laws 49 legal documents /regulations, rules, methodologies/ should be adopted and implemented. In the framework of 3 main objectives to support economics, collect tax completely, and support taxpayers legal reform of the law on taxation has been made and it has considered that it has had significance to decrease taxation load, reduce the number of statements, support exchange market and decrease loan interest.
In the framework of legal reform some special amendments on corresponding with taxes of business entities have been specified. Particularly, period of limitation of tax was reduced, in other words term to conduct taxation examination and control, make act on imposing indemnification and impose undue loss and penalty, which was 5 years, was reduced to be 4 years and term to pay tax debt, which was extended up to 2 months, shall possibly be extended up to 2 years. Amendments including issuing opportunity to correct statement for the period of a year, were specified. As well as deductible cost from tax has been increased, particularly, through putting appropriate criteria not limiting deductible cost only in a list it is possible to deduct costs, which cannot be deducted currently concerning to the business activities.
Also one of important amendments is to render tax support in long distance local area. Tax to impose on income of activities of individuals and business entities, which conduct activities in aimags and soums in the distance over 500km from Ulaanbaatar, shall be reduced in 50 percent and over 1000km in 90 percent. Participants of the debate answered their questions concerning to the legal reform and took responds and expressed their opinions on problems in practice.
As for business providers of communication operate to deliver their service to the most remote areas of Mongolia and thus business entities of the rural area have not issued e-documents and it causes difficulty to statements. There have been many cases governmental agencies has not issued e-documents. Also there have been difficulties in practice concerning to deduction of income tax from relations including payment of membership tax of the international organizations, taking service from this similar business providers of other countries. Senior taxation inspector P.Undarmaa explained planning to take definite measures on the above mentioned issues as for the policies of the Mongolian Taxation Authority. In order to constitute taxation registration, database, completely transfer taxation service in electronic version, decrease risks to avoid taxes through implementing rules and regulations of “BERS” against decreasing taxation fundamentals and transfer profit and protect taxation bases to introduce rules and regulations against price transformation in accordance with the international standards, it has planned to conduct activities to mutually exchange information with over 190 countries of the world. Participants of the debate highlighted with the same opinion the needs to introduce about the legal reform to citizens have raised appropriately and expressed their opinions it is appropriate to prepare and distribute video and posters explaining the law using ordinary words and phrases in order to recognize legal reform to the all citizens business entities.
General Department of Taxation has planned to conduct definite activities on it. Particularly, it considers that through making transparent, open and united recommendation to implement taxation laws and regulations to the public it shall suspend to explain and use the law differently as for taxation inspectors and tax payers and understand and implement the law identically.
Special understanding of this meeting has been that it is possible to express opinions and requests on how to solve the difficult issues in practice from the member companies of the association to the General Department of Taxation in written.