Dear Members and Stakeholders,
AustCham Mongolia is pleased to announce the release of its new report:
“Comparative Study of Mongolia’s Taxation of Mining Exploration and Mining Licence Transfers: A Comparison with Australia, Canada and Kazakhstan.”
The report provides an in-depth comparison of taxation approaches applied to mining exploration and mining licence transfers across Mongolia, Australia, Canada, and Kazakhstan.
Key Findings
Mongolia has established a comprehensive tax framework governing the transfer of mining interests, including indirect transfers through the sale of shares in entities holding mining licences. The policy objective behind this framework is aligned with international efforts to prevent tax avoidance through Offshore Indirect Transfers (OITs) involving natural resource assets.
International organizations, including the OECD, IMF, United Nations, and World Bank, recognize the ability of resource-rich countries to tax gains arising from transfers of location-specific assets such as mining licences and petroleum rights.
The study finds that the key area of debate is not the principle of taxation itself, but rather the methodology used to determine taxable value.
Comparison with Australia, Canada and Kazakhstan
The report highlights that Australia, Canada, and Kazakhstan generally determine taxable amounts based on market-based transaction values, realized gains, or consideration received from transfers.
In contrast, Mongolia’s valuation framework under Ministry of Finance Order No. 302 (2019) may calculate taxable value using the Net Present Value (NPV) of a mining project. This approach can potentially result in tax obligations that exceed the actual transaction value or realized gain from a licence transfer.
Supporting Policy Dialogue
AustCham Mongolia’s study aims to support evidence-based discussion on improving transparency, predictability, and competitiveness within Mongolia’s mining taxation system.
The report provides valuable insights for policymakers, investors, mining companies, and professional advisors seeking a better understanding of international practices and potential areas for reform.
We invite our members and stakeholders to review the full study and participate in continued dialogue on Mongolia’s mining sector development.
AustCham Mongolia