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9.1. Unilateral and Treaty Based Methods Available for the Elimination or Mitigation of Double Taxation

Mongolia does not provide for a unilateral relief for taxes paid on foreign sourced income. However, bilateral relief may be available under the relevant provisions of the tax treaties entered into by Mongolia. See Note on proposed tax reform at the beginning of this chapter for proposed changes with potential impact on the foreign tax credit rules.

Below is a summary of the available methods for various income tax streams based on domestic law.

Royalty Copyright ND
Capital Gains ND
Dividends ND
Interest ND
Royalty Patent ND
Sales ND
Service Management ND
Service Technical ND
Royalty Trademark ND

The credit column shows the type of foreign tax credit granted when the receiving country receives a payment.  Four abbreviations are used for the type of foreign tax credit available:

  • NC means no credit but foreign withholding taxes can be deducted.
  • OC means ordinary credit, i.e., credit for foreign withholding taxes (e.g., withholding taxes).
  • IC means indirect credit, i.e., credit for underlying corporate taxes as well as foreign withholding taxes.
  • ND means no credit and no deduction for any foreign withholding taxes incurred.