Mongolia Adopts OECD's Three-Tiered Transfer Pricing Documentation

Following the announcement that it has joined the Inclusive Framework on BEPS¹, the Mongolian Parliament has revised its transfer pricing regulations contained in General Taxation Law ("Revised GTL") and associated guidelines, which adopts the three-tiered transfer pricing documentation requirement to align with the recommendations from OECD BEPS Action 13.

Highlights of the revised GTL include:

• Related party definition – the Revised GTL retains the existing threshold for related party relationships at 20% i.e. holding at least 20% ownership (directly or indirectly) in the shares or business profits of another entity. Moreover, two entities may be considered as related parties in certain arrangements which share a common position or common interest.