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6.5. Deduction of Cross-Border Payments and Non-Deductible Expenses

Expenses incurred for the purpose of business are deductible unless they are specifically disallowed.

The following general expense types are not deductible or have limited deductibility for Mongolia tax purposes:

  • Expenses incurred in earning exempt income
  • Undocumented expenses
  • Payments from which tax is withheld incorrectly
  • Rental payments under finance lease
  • Fines and penalties imposed by the tax authorities
  • Organizational and start-up expenses
  • Bribes, kickbacks and illegal payments
  • Charitable contributions except for donation to vocational training fund
  • Voluntary contribution to social insurance fund exceeding 15% of taxable income
  • Regular maintenance expenses in excess of 2% of book value of immovable property and 5% of book value of other property
  • Natural disaster restoration fees