Tax risk assessment and tax scoring reform

Mongolia • No 02/2023 • August 2023

Mongolian Tax Authority (MTA) has implemented a new functionality in its electronic tax system which allows, starting June of 2023, taxpayers to view their tax risk assessment and their tax scoring. With this tax and legal alert, we present you the highlights of the general tax risk assessment and tax scoring system implemented by the MTA.

General risk management principle introduced by MTA:

Per the General Tax Law (GTL) of 2020, MTA has been employing the risk-based approach when it comes to tax inspections. Consequently, the reform in the electronic tax system is introduced to promote transparency between the MTA and the taxpayers. Additionally, this enables the taxpayers to manage their own tax risk by providing them with the opportunity to identify and reduce factors that affect their tax score.

Tax Risk Assessment related legislation:

Law	The GTL, dated 22 March 2019, provides general risk management (“RM”) rules including the RM principles, stages of implementation of RM measures, and other principles such as the body that promulgates RM-related procedures.
Procedure	“Operating procedures of the Risk Management activities of the tax office and its Risk Management committee” approved by Ordinance #305 of the Minister of Finance on 31 December 2019, provides the underlying guidelines and framework for risk identification, assessment, management, and supervision of the risk management activities.

General Risk assessment (R) calculation formula

R = a1 • R1 + a2 • R2 + a3 • R3 + a4 • R4 + a5 • R5

_{a(1,2,3,4,5) - Percent weight on each indicator}