By Elena Fehrbach
Aug. 4 – According to the announcement by the Ministry of Foreign Affairs of Luxembourg as of July 30, foreign ministries of Luxembourg and Mongolia have agreed to negotiate a Tax Treaty on Avoidance of Double Taxation.
Mr. Jean Asselborn, the Foreign Minister of Luxembourg has visited Mongolia for bilateral meetings with Mr. D. Terbishdagva, Deputy Prime Minister of Mongolia and Mr. B. Luvsanvandan, Minister of Foreign Affairs of Mongolia. Among other issues discussed, Mr. Asselborn has initiated the discussion about the Tax Treaty that would allow improving and facilitating better access to investment services from Luxembourg.
Mongolian Ministers has agreed to continue negotiations after Mongolian Parliament finalizes new legal framework related to foreign investments.
Current negotiations demonstrate a positive step towards improvement in investment climate in Mongolia. During the past year Mongolia has been actively reviewing and implementing a number of new regulations related to foreign investments and as a result, the level of foreign direct investment to Mongolia has significantly dropped due to long implementation time and a number of new conditions in regulations that were treated by many investors as unfavorable. New negotiations with Luxembourg are important in the establishment of trustful investment relationship. A tax treaty between two countries has existed before, but in 2012 Mongolia cancelled its tax treaties with four countries, Luxembourg among them. The other three countries were Kuwait, UAE and the Netherlands.