Mongolia – Changes in Tax Rates, Pension & Social Security Contribution Rates – 1st January 2026

Tax rates

Key Changes to Personal Income Tax (PIT):

• New Tax-Free Threshold: Employees with monthly employment income of up to MNT 800,000 will no longer be subject to PIT. Annually, this means the first MNT 9.6 million of wages is now tax-free.
• Taxable Income: Only the portion of monthly income that exceeds MNT 800,000 will be subject to PIT.
• Progressive Tax Rates: The progressive PIT rates remain unchanged at 10%, 15%, and 20% for higher earnings.
• Annual Brackets: The existing annual income thresholds of MNT 120 million and MNT 180 million for the higher progressive rates have not been indexed and remain the same.

In contrast, in 2025, no general exemption existed, meaning wages were taxed from the first tugrik earned, aside from a minor annual credit of up to MNT 160,000 for low incomes.

Example

An employee earning MNT 1,484,000 per month will only be taxed on MNT 684,000 (MNT 1,484,000 – MNT 800,000) at the applicable progressive rate.

Enhanced Tax Deductions – Housing/Green Investment Incentive

The maximum deduction amount has been raised to MNT 15,000,000

This increased limit supports policies promoting housing, regional development, and the adoption of green technology.

Taxpayers who meet specific criteria (such as first-time home buyers, purchasing an energy-efficient dwelling, or relocating to a designated rural area) are eligible to claim a significantly higher deduction.

For qualifying individuals, this higher deduction can result in a tax saving of up to MNT 1.5 million (at a 10% tax rate), an increase from the previous MNT 600k(2025).

Adjustments have also been made to other personal reliefs, including deductions for education tuition fees. A specific threshold for tuition-fee-related tax breaks has been established, though the details of this cap are pending official publication and confirmation.

Please contact your Mercans’ services delivery team for any additional information regarding the implications of the above change.

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Mongolia – Changes in tax Rates, Pension & social security contribution rates – 1st January 2026

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