| Category | Annual Taxable Income | Tax Rate | Explanation |
|---|---|---|---|
| General tax rate for most companies | Up to MNT 6 billion | 10% | A flat 10% tax rate applies |
| General tax rate for most companies | Over MNT 6 billion | 25% on the excess | 10% applies to the first MNT 6 billion and 25% to the excess |
| Small and medium-sized enterprises eligible for tax relief | Up to MNT 300 million | 1% effective rate | A flat 1% tax rate applies |
| Small and medium-sized enterprises eligible for tax relief | MNT 300 million–1.5 billion | 10%, with a 90% tax credit | Tax is calculated at 10%, after which 90% of the assessed tax is credited |
| Sectors not eligible for tax relief | Regardless of income | 10% or 25% | No preferential tax treatment applies to certain sectors, including mining and the production of alcoholic beverages and tobacco products |
Additional Information
Progressive Tax Calculation Example
If a company has annual taxable income of MNT 100 billion:
- First MNT 6 billion × 10% = MNT 600 million
- Remaining MNT 94 billion × 25% = MNT 23.5 billion
- Total corporate income tax: MNT 24.1 billion
Small and Medium-Sized Enterprises
For the purpose of this tax relief, eligible SMEs generally include companies engaged in manufacturing or service activities with annual taxable income below MNT 1.5 billion.
Sectors Not Eligible for the Tax Relief
The preferential tax treatment does not apply to certain regulated or licensed sectors, including:
- Mining and petroleum
- Production of alcoholic beverages and tobacco products
- Importation and sale of petroleum products
- Other specially licensed activities specified by law
