Law on Annulment of Agreements Between the Government of Mongolia and the Government of Four Countries

This information was prepared as a general guidance only, and should not be used as a specialized legal conclusion.

February 6 (GRATA Law Firm) --

On 2 November 2012 the Parliament of Mongolia has passed the law on annulment of agreements between the Government of Mongolia and the Government of four countries on avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income.

In line with GRATA Law Firm's practice of keeping clients informed of important legal developments that may influence their business.

1. General Provisions

The Parliament of Mongolia has passed the following four laws on 2 November 2012 on annulment of agreement between the Government of Mongolia and the Government of four countries on avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income treaties. They are:

1) Annulling the law on Ratifying the Agreement between the Government of Mongolia and the Government of Kuwait on avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income treaties dated 30 July 1998;

2) Annulling the law on Ratifying the Agreement between the Government of Mongolia and the Kingdom of Luxemburg on avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income treaties dated 5 April 2001;

3) Annulling the law on Ratifying the Agreement between the Government of Mongolia and the Kingdom of the Netherlands on avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income treaties dated 30 October 2002;

4) Annulling the law on Ratifying the Agreement between the Government of Mongolia and the United Arab emirates on avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income treaties dated 23 October 2003.

2. Expiry dates of the agreements

According to an official document (Ref N 2/1121) by the Ministry of Justice dated 19 November 2012, the above agreements on avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income will expiry from:

1) 1 January 2014 for the Kingdom of the Netherlands;

2) 1 January 2014 for the Kingdom of the Luxembourg;

3) 1 January 2015 for the United Arab Emirates and;

4) 1 April 2015 for Kuwait.

3. Reasons of annulment

We have contacted with the Taxation Authority of Mongolia and inquired about the annulment of these agreements. The core reason is the agreements are more favorable to other parties of the agreement and less favorable for Mongolia.

4. Conclusion

In our view, the annulment of these agreements would have an adverse impact on the existing and future investment from above mentioned four countries and reduce business framework with these countries.

*******

This Client Note provides an analysis of certain prospective amendments to the legislation of Mongolia. Any questions regarding the matters herein may be addressed to:

Bolormaa Volodya

Senior Lawyer

GRATA Law Firm

ulaanbaatar@gratanet.com

Comments

Popular posts from this blog