Permanent establishment registration process

Permanent Establishment is defined in Article 6 of the Corporate Income Tax Law and Articles 5 and 7 of the “International Convention on the Prevention of Double Taxation and Tax Evasion on Income and Capital”. In short, a PERMANENT ESTABLISHMENT is a unit that fully or partially conducts the activities of a taxpayer in Mongolia.


The following units shall be deemed as permanent establishment:

  1. units of management of an enterprise;
  2. branches and departments;
  3. units responsible for training, seminars and exhibitions;
  4. units responsible for warehousing, sale and services;
  5. units responsible for mines, oil or gas boreholes, and mining of minerals;
  6. plants;
  7. other departments, units and places.

In addition, the following units, persons, and activities are considered to be permanent establishment:

  1. Units undertaking activities with regard to construction sites, buildings, assembling and installation facilities, and other related construction and controlling works for a period of 90 days or more during the course of consecutive 12 months shall be deemed as representative offices;
  2. Units providing technical, consulting, management, controlling and other services to taxpayers residing in Mongolia, on its own or through hired skills, for a period 183 days or more during the course of consecutive 12 months shall be deemed as representative offices;
  3. Units conducting the following activities in Mongolia on behalf of a taxpayer not residing in Mongolia shall be considered as permanent establishment:
    1. the storage, sale and supply of goods and products;
    2. the conclusion of contracts in person or the arrangement for concluding contracts on behalf of a non-resident taxpayer without altering the main conditions of the contracts.Any contract featuring any of the following conditions:
    3. to be established in the name of a non-resident taxpayer;
    4. to transfer properties or the rights to use or possess such properties that a non-resident taxpayer owns or, if doesn’t own, has the rights to use or possess;
    5. to provide services offered by a taxpayer not residing in Mongolia.

Any non-resident taxpayer receiving insurance premiums, other than multiple insurance, or offering a risk insurance in Mongolia through other parties shall be considered as having a permanent establishment in Mongolia.

Read more →

Practice areas
Stay up to date with the latest legal news, publications and events: