background image
13.4.3. Documentation Requirements

Disclosure Requirements

From 28 April 2017, taxpayers are required to submit bi-annually (by 20 July and 10 February) a report of annual controlled transactions to the tax authorities along with the tax return. The disclosure must be filed in a ‘Form XXM-01 — Related Party Transaction Disclosure Form’ released by the tax authorities in April 2018.

Standard Documentation

The tax authorities may require the taxpayer to submit TP documentation during a tax audit. The TP documentation is required to be provided to the tax authorities within 20 days from the request made by them.

The documentation should provide the following information:

  • Information of related parties such as names, relationship between the related parties;
  • The nature of transactions entered into with the related parties;
  • Overview of the group and the company profile;
  • Amount of income, expenses related to the transactions and its profitability;
  • The TP method used in determining the value of the transactions entered into with the related parties, supported by comparable, if available;
  • Information of recent restructuring of the group or change in ownership, if any.

Language of Documentation

The TP documentation is required to be in Mongolian language.

Penalties

Failure to provide documentation or incorrect documentation attracts a penalty ranging from MNT 1.5 million to 4 million for every non-compliance.

Country-by-Country (CbC) Reporting

Mongolia has till date not introduced a Country-by-Country reporting requirement. However, it has joined the OECD’s Inclusive Framework, membership of which presupposes a commitment to implement the BEPS minimum standards, including Country-by-Country reporting. Furthermore, the tax reform plan submitted to Parliament clarifies that the country is to introduce all measures needed to comply with the OECD’s BEPS and Global Forum on Transparency and Exchange of Information frameworks.