The Mongolian Government has issued its first transfer pricing tax assessment, hitting a mining company with a tax bill of approximately USD 228 million and a denial of USD 1.5 billion in carried forward losses, the OECD said on 18 March. The tax assessment was issued in late 2020 and currently remains in dispute.

The move represents “a significant milestone and step forward” for the Mongolian tax administration in strengthening its efforts to combat tax base erosion and profit shifting (BEPS) in the mining sector, said the OECD. The 37-member nation group has been working with Mongolia since 2019 to shore up its tax collections from the extractives sector, which contributed more than 80 percent of Mongolia’s exports and 24 percent of fiscal revenues in 2019.

“Mongolia is successfully implementing the BEPS measures by introducing a number of international taxation provisions,” the OECD said.

Launched in 2015, the Tax Inspectors Without Borders programme is designed to support developing countries in building tax audit capacity. The programme sends tax experts from around the world to work side by side with local officials on pre-audit risk assessment and case selection, investigatory techniques, transfer pricing audits, and sector-specific issues. (mnetax)