Amendments to the Minerals Law and related tax issues

Mongolia • No.4/2024 • May 2024

On April 19, 2024, the Mongolian Parliament approved the Law on the Sovereign Wealth Fund. This legislation outlines the procedures for establishing, distributing, and managing the Sovereign Wealth Fund. The primary objective of this law is to ensure the equitable and fair distribution of mineral resource benefits to every citizen of Mongolia, both present and future. 

In connection with the approval of this law, respective amendments (“Amendments”) have been made to the Minerals Law. Thus, we hereby highlight the new regulations introduced by these Amendments, along with related tax changes.

Key updates to the Minerals Law

• Restrictions imposed on shares
• Authorized representative
• State ownership of shares in derivative deposits associated with strategically important mineral deposits
• Pending procedures

Related tax changes

• Special tax rate
  

The tax is levied at a rate of 30 percent if the beneficial owner of a mining license holder for a strategically important mineral deposit fully or partially transfers the right to own and use land, as well as exploration and exploitation licenses for minerals, radioactive minerals, and oil. Such transfers may occur through gifting or bequeathing shares, participation, or voting rights of a legal entity.