Tax Incentives for Expatriates and Digital Nomads in Mongolia
Mongolia recognizes the growing trend of remote work and the influx of expatriates and digital nomads. To attract and retain skilled professionals, the country offers a range of tax incentives tailored to these individuals.
Eligibility Criteria
To qualify for tax breaks, expatriates and digital nomads must meet specific criteria:
- Expatriates: Individuals who are not Mongolian citizens or permanent residents and have been employed in Mongolia for less than 183 days in a calendar year.
- Digital Nomads: Individuals who work remotely for non-Mongolian companies and have a temporary residence in Mongolia.
Types of Tax Breaks
Expatriates and digital nomads can benefit from the following tax breaks:
- Tax Exemption on Foreign Income: Expatriates are exempt from paying Mongolian income tax on income earned outside of Mongolia.
- Reduced Tax Rate on Employment Income: Expatriates employed in Mongolia pay a reduced income tax rate of 10%, compared to the standard rate of 15%.
- Tax Deductions for Housing and Education: Expatriates can deduct expenses related to housing and education from their taxable income.
Application Process
To claim these tax breaks, expatriates and digital nomads must:
- Submit an application to the Mongolian Tax Authority within 30 days of arrival in Mongolia.
- Provide documentation to prove their eligibility, such as a work contract or proof of foreign income.
- Pay a registration fee of approximately $50.
Legal Framework
The tax incentives for expatriates and digital nomads are outlined in the following legal documents:
- Law on Income Tax: Article 14 defines the tax treatment of expatriates and foreign income.
- Law on Personal Income Tax: Article 10 specifies the reduced tax rate for expatriates employed in Mongolia.
- Government Resolution No. 144: Provides guidelines for the application process and tax deductions.
Rationale and Objectives
These tax policies aim to:
- Attract and retain skilled professionals and digital nomads to Mongolia.
- Promote economic growth and innovation by fostering a favorable business environment.
- Support the development of Mongolia as a hub for international talent and remote work.
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