(2024-10-01-ний өдрийн орчуулга)                                               Unofficial translation

Entry into force date: June 01, 2025

LAW OF MONGOLIA

June 5, 2024                                                                      State Palace, Ulaanbaatar City

ON CITY TAX

(REVISED EDITION)

CHAPTER ONE

GENERAL PROVISIONS

Article 1.Purpose of the Law

1.1.The purpose of this Law is to regulate the relations in connection with imposition of city taxes in Ulaanbaatar, the Capital city of Mongolia, and in cities and towns of national and local significance, as well as the collection of these taxes for the budget, and reporting on them.

Article 2.City Tax Legislation

2.1.The City tax legislation shall consist of the Constitution of Mongolia, the General Taxation Law, the Law on the Legal Status of Ulaanbaatar, the Capital City of Mongolia, the Law on the Legal Status of Cities and Towns, this Law, and other legislative acts enacted in accordance with these laws.

Article 3.Scope of the application of the Law

3.1.This Law shall apply to the relations concerning the imposition of city taxes on persons purchasing goods and services specified in this Law within the territory of Ulaanbaatar, the Capital city of Mongolia, and other cities of national and local significance, as well as the collection of these taxes for the budget.

Article 4.Definitions of terms of the Law

4.1.The following terms used in this Law shall be understood in the meanings described below:

4.1.1."City Tax Withholder" shall refer to an entity that sells goods or provides services as specified in Article 7 of this Law;

4.1.2."City" shall refer to a public legal entity as defined in Article 4.1 of the Law on the Legal Status of Cities and Towns;

4.1.3."Hotel" shall refer to a complex that accommodates guests and provides lodging, dining, and other services, equipped with additional facilities and specialized departments;

4.1.4."Resort" shall refer to a facility that operates year-round or seasonally, providing accommodation, dining services, and comfortable conditions for guests to relax;

4.1.5."Restaurant" shall refer to an establishment that organizes high-quality service, preparing a variety of dishes, including signature and customized meals, using advanced production techniques and ensuring a comfortable dining experience for customers;

4.1.6."Bar" shall refer to a service establishment equipped with music, lighting, and other specialized devices, designed for customers to enjoy their leisure time comfortably, offering a variety of drinks, light snacks, and desserts;

4.1.7. "Car wash facility" shall refer to a facility providing comprehensive services for cleaning vehicles;

4.1.8. "Auto Service Provider" shall refer to a citizen or a business entity providing services related to the operation and maintenance of motor vehicles, excluding public transport.

CHAPTER TWO

REGISTRATION AND DEREGISTRATION OF

CITY TAXPAYERS AND

TAX WITHHOLDERS

Article 5.City Taxpayer

5.1.An entity that purchases goods and services specified in this Law from a city tax withholder /hereinafter referred to as "Tax withholder"/ shall be considered as a City Taxpayer.

Article 6.Registration and Deregistration of Tax Withholder

6.1.Based on the information provided by the administration of the capital city, administration of cities and towns of national and local significance, as well as other competent authorities that grant permits for the sale of goods and the provision of services specified in this Law, and the application/request from the tax withholder, the relevant tax authority shall register the entity as a city tax withholder.

6.2.The procedure for registering and deregistering tax withholder shall be approved by the Head of the state administrative body in charge of tax matters.

CHAPTER THREE

TAXABLE GOODS AND SERVICES FOR CITY TAX

Article 7.Taxable Goods and Services for City Tax

7.1.The following goods purchased by the taxpayer shall be subject to city tax:

7.1.1.All types of alcoholic beverages;

7.1.2.All types of tobacco, tobacco products, and related accessories.

7.2.The following services purchased by the taxpayer shall be subject to city tax:

7.2.1.Hotel services;

7.2.2.Resort services;

7.2.3.Restaurant services;

7.2.4.Bar services;

7.2.5.Car wash facility services;

7.2.6.Auto services.

CHAPTER FOUR

PROCEDURE FOR IMPOSING CITY TAX

Article 8.Assessment of City Tax

8.1.City tax shall be imposed on each sale of goods or provision of services.

8.2.The assessment of City Tax shall be based on the price of the goods sold and the services rendered.

8.3.The period for imposing City Tax shall be calculated in accordance with the procedures specified in Article 10.2 of the Law on Value Added Tax.

8.4.The Tax Withholder shall be obligated to issue an electronic payment receipt for each sale of goods and provision of services, which must be provided to the City tax payer. The electronic payment receipt must clearly distinguish the City tax rate and the assessed amount from the taxable value of the City tax.

CHAPTER FIVE

CITY TAX RATE

Article 9.City Tax Rate

9.1.City tax shall be imposed on taxable goods and services purchased by the tax payer, calculated based on the assessment specified in Article 8 of this Law at the rate prescribed in Article 9.2 of this Law.

9.2.The City tax rate shall be determined by the Citizens' Representatives' Khural of the Capital city and Councils of cities of national and local significance, within a range of 0-2.0 percent, by taking into account of the location and population density.

CHAPTER SIX

COLLECTION AND REPORTING OF CITY TAX

Article 10.Imposition, Payment, and Reporting of City Tax

10.1.The tax withholder shall withhold and pay the City tax for each sale of goods and provision of services.

10.2.City tax shall not be imposed redundantly on the same goods, and previously imposed taxes shall be deducted based on the electronic payment receipt and the City tax report.

10.3.The tax withholder shall pay the City tax imposed on the goods sold and services rendered within the month to the budget by the 10th day of the following month.

10.4.The tax withholder shall submit the quarterly city tax report to the relevant tax authority by the 20th day of the first month of the following quarter, and the annual report by the 20th day of the first month of the following year.

10.5.In calculating the City tax, the tax withholder shall exclude other taxes, fees, and charges from the price of the goods sold and services rendered.

10.6.The tax withholder shall have a consumer system as specified in the Law on Value Added Tax and shall implement the activities specified in Article 17.3 of the same law.

10.7.The methodologies for imposing, paying, and reporting City tax, as well as the reporting forms, shall be approved by the Head of the state administrative body in charge of tax matters.

CHAPTER SEVEN

MISCELLANEOUS

Article 11.Entry into force of the Law

11.1.This Law shall enter into force on the entry into force date of the Law on the Legal Status of Cities and Towns (Revised edition).

THE CHAIRMAN OF THE STATE GREAT KHURAL OF MONGOLIA ZANDANSHATAR.G