Zhitong Finance App News, Mongolia Energy (00276) issued an announcement. MoEnco received a notice from the Mongolian Taxation Bureau on the results of tax investigation results on certain tax items during the 2017 to 2020 tax period. MoEnco's supplementary tax increase for the relevant period was approximately US$52.1 million. MoEnco then appealed the tax investigation results, and the Mongolian Tax Dispute Resolution Committee held a hearing on January 29, 2024.
On February 14, 2024, MoEnCo received a written decision from the Tax Dispute Resolution Committee after hearing and review. The letter set out the request to suspend supplementary tax payments, pending re-investigation of some tax items by the Mongolian tax authorities. The tax items re-investigated include transfer pricing, withholding tax, unrealized exchange losses, depreciation from exploration, depreciation of assets and roads, etc., totaling approximately US$48.6 million. However, in some tax cases, the Tax Dispute Resolution Committee did not order a re-investigation. That is, royalties, overdue royalties, coal consumption, and real estate taxes totaled about US$3.48 million. As it is unclear whether a final tax review decision has been made on a non-reinvestigation project, MoEnco requested clarification from the Tax Dispute Resolution Committee. The Tax Dispute Resolution Committee replied that the final decision on all items (including non-reinvestigation items) will be heard immediately after the tax authorities have completed the re-investigation of the re-investigation project.
On February 23, 2024, MoEnco was notified by the tax authorities that the re-investigation procedure will commence on or about March 7, 2024, for a period of 45 working days. The next hearing before the Tax Dispute Resolution Committee will take place after the re-investigation process has been completed, but the timing is not yet known.
The Group is evaluating the impact of the Tax Dispute Resolution Committee notice. In any case, if the Group does not agree with the final decision of the Tax Dispute Resolution Committee after the next hearing, the Group can further appeal to the Mongolian court within 30 working days of receiving the final decision of the Tax Dispute Resolution Committee.