Russia has offered countries belonging to the Shanghai Cooperation Organization (SCO) to join its financial messaging system (SPFS), the Russian equivalent of SWIFT. Moscow wants to boost the volume of settlements in national currencies, the country's Economic Development Minister Maxim Reshetnikov said on Tuesday.

“In order to ensure uninterrupted cooperation between our banks, we suggest that members of the organization join the Russian financial messaging system,” Reshetnikov said in his video address to participants at the SCO forum in Uzbekistan.

Reshetnikov noted that SCO countries need to continue to promote full compatibility of national payment systems and boost the volume of mutual settlements in national currencies.

“We already see positive results, for example, a quarter of the trade turnover between Russia and China is settled in rubles and yuan,” Reshetnikov said.

The SCO currently comprises eight member states: China, India, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Pakistan and Uzbekistan, while its partners and associates also include Afghanistan, Belarus, Iran, Mongolia, Armenia, Azerbaijan, Cambodia, Nepal, Turkey and Sri Lanka. The organization’s work focuses mainly on security issues, but it also deals with regional development tasks.

Russia has been actively promoting its domestic financial messaging system ever since being cut off from SWIFT as part of Western sanctions imposed on the country over the conflict in Ukraine. Both facilitate financial transactions between banks, but Russia’s SPFS was used only in Russia up until this year, while SWIFT is an internationally adopted system.

It is important for businesses of both countries to understand and avail the benefits derived from the double tax avoidance agreement signed between China and Mongolia to ease their tax burden.

In recent years, the comprehensive strategic partnership between Mongolia and China has developed rapidly, leading to accelerated investment and trade activities between the two countries.

From the 5,800 legal entities with Chinese investment registered in Mongolia, 1,690 have stable operations and pay taxes.

In this situation, it’s important for businesses of both countries to understand and avail the avoidance agreement (DTA) signed between China and Mongolia to ease their tax burden.

Upon the establishment of the modern tax administration of Mongolia in 1991, China was the first country to sign “The Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income” with the Government of Mongolia (China-Mongolia DTA).

In this article, we briefly introduce the key elements of the DTA established between Mongolia and China.

Key elements of the China-Mongolia DTA

Personal scope

The China-Mongolia DTA applies to persons who are residents of one or both of the Contracting States, i.e., Mongolia and China.

Residents refer to any person who, under the laws of that State, is liable to pay local taxes by reason of their domicile, residence, place of head office, or any other criterion of a similar nature.

Taxes covered

The China-Mongolia DTA applies to taxes on income imposed on behalf of each Contracting State, irrespective of the manner in which they are levied.

Taxes on income refer to to all types of taxes imposed on income and components of income, including income taxes on sales of movable and immovable property and income taxes on increases in property valuation.

In case the business entity of a Contracting State operates via a local representative office, only corporate income on revenue generated by the representative office can be taxed.

The existing taxes (at the time of signature) to which the China-Mongolia DTA shall apply in Mongolia are:

Individual income tax;

Income tax for enterprises with foreign investment;

Income tax concerning foreign enterprises; and

Local income tax.

The existing taxes (at the time of signature) to which the China-Mongolia DTA shall apply in Mongolia are:

Individual income tax;

Income tax for enterprises with foreign investment and foreign enterprises; and

Local income tax.

To be noted, this China-Mongolia DTA shall also apply to any identical or substantially similar taxes which are imposed after the date of signature in addition to, or in place of, the abovementioned taxes. The competent authorities of China and Mongolia shall notify each other of any substantial changes which have been made in their respective taxation laws within a reasonable period of time after such changes. For example, China unified the income tax for domestic enterprises and foreign invested enterprises in 2008.

Income from immovable property

Income derived by a resident of a Contracting State from immovable property situated in the other Contracting State may be taxed in that other Contracting State.

The term “immovable property” is defined by the law of the Contracting State in which the property in question is situated. It includes property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources, and other natural resources. However, ships, aircraft, and land vehicles shall not be regarded as immovable property.

Business profits

The profits of an enterprise of a Contracting State shall be taxable only in that Contracting State unless the enterprise carries on business in the other Contracting State through a permanent establishment. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other Contracting State, but only so much of them as is attributable to that permanent establishment.

The term “permanent establishment” means a fixed place of business through which the business of an enterprise is wholly or partly carried on. It includes a place of management, a branch, an office, a factory, a workshop, any place of extraction of natural resources, as well as a building site/construction/assembly/installation project/supervisory activity that continue for a period of more than 18 months and the furnishing of services that continue for the same project or a connected project for a period or periods aggregating more than 18 months.

Dividends

Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other Contracting State.

However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that Contracting State, but if the recipient is the beneficial owner of the dividends the tax should not exceed five percent of the gross amount of the dividends.

Interest

Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other Contracting State.

However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that Contracting State, but if the recipient is the beneficial owner of the dividends – the tax should not exceed 10 percent of the gross amount of the dividends.

Royalties

Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other Contracting State.

However, such royalties may also be taxed in the Contracting State in which it arises and according to the laws of that Contracting State, but if the recipient is the beneficial owner of the dividends the tax should not exceed 10 percent of the gross amount of the dividends.

This applies to payments of any kind received as a consideration for the use of or copyright of literary, artistic, or scientific work, including cinematograph films and films or tapes for radio or television broadcasting.

Capital gains

The below capital gains derived by a resident of a Contracting State may be taxed in that other Contracting State:

Gains from the sale of immovables situated in the other Contracting state;

Gains from the sale of business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services;

Gains from the sale of ships, aircraft, or land vehicles operated in international traffic or movable property pertaining to the operation of such ships, aircraft or land vehicles (taxable only in that Contracting State in which the place of head office of the enterprise is situated);

Gains from the sale of shares of the capital stock of a company the property of which consists directly or indirectly principally of immovable property situated in a Contracting State; and

Gains from the sale of other shares representing a participation of at least 25 percent in a company which is a resident of a Contracting State.

Gains from the sale of any property other than the abovementioned shall be taxable only in the Contracting State of which the seller is a resident.

Shipping, air, and land transport

Profits from the operation of ships, aircraft, or land vehicles in international traffic shall be taxable only in the Contracting State in which the place of head office of the enterprise is situated.

If the place of head office of a shipping enterprise is aboard a ship, then it shall be deemed to be situated in the Contracting State in which the home harbor of the ship is situated, or if there is no such home harbor, in the Contracting State of which the operator of the ship is a resident.

Methods for elimination of double taxation

In Mongolia, double taxation shall be eliminated as follows:

Where a resident of Mongolia derives income from China, the amount of tax on that income payable in China in accordance with the provisions of the China-Mongolia DTA, may be credited against the Mongolian tax imposed on that resident. The amount of credit, however, shall not exceed the amount of the Mongolian tax on that income computed in accordance with the taxation laws and regulations of Mongolia.

Where the income derived from China is a dividend paid by a company which is a resident of China to a company which is a resident of Mongolia and which owns not less than 10 percent of the shares of the company paying the dividend, the credit shall take into account the tax paid to China by the company paying the dividend in respect of its income.

In China, double taxation shall be eliminated as follows:

Where a resident of China derives income from Mongolia the amount of tax on that income payable in Mongolia in accordance with the provisions of the China-Mongolia DTA, may be credited against the Chinese tax imposed on that resident. The amount of credit, however, shall not exceed the amount of the Chinese tax on that income computed in accordance with the taxation laws and regulations of China.

Where the income derived from Mongolia is a dividend paid by a company which is a resident of Mongolia to a company which is a resident of China and which owns not less than 10 percent of the shares of the company paying the dividend, the credit shall take into account the tax paid to Mongolia by the company paying the dividend in respect of its income.

For full version of the China-Mongolia DTA, please click here.

Other cooperation between China and Mongolia

Within the framework of the “Comprehensive Partnership Strategy of Mongolia”, the Mongolian Tax Administration joined the Belt and Road Initiative Tax Administration Cooperation Mechanism – established as part of China’s “Belt and Road Initiative” to unite the tax administrations of countries located along the Silk Road. This enabled Mongolia to engage in bilateral and regional information-sharing on taxpayers.

Also, on January 17, 2018, an association of Chinese-funded companies in Mongolia was formed under the “Belt and Road Initiative”, uniting the local branches of the Bank of China, Air China, Industrial and Commercial Bank of China, Petro China, China Nonferrous Metal Mining, China United Cement Corporation, China Tiesiju Civil Engineering Group, and China National Tobacco Corporation in the country.

The main goal of the association is to support the relations between Mongolia and China by elevating the cooperation between Chinese business entities in Mongolia to an advanced level, allowing for resource-sharing between member organizations, and leveraging shared benefits, according to the Ministry of Foreign Affairs of China.

(Khandsuren Orgodol/Khanda works for DBiAA, one of Dezan Shira & Associates’ Asian Alliance Partners. She may be reached at admin@dbiaa.org.)

About Us

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

Dezan Shira & Associates has offices in Vietnam, Indonesia, Singapore, United States, Germany, Italy, India, and Russia, in addition to our trade research facilities along the Belt & Road Initiative. We also have partner firms assisting foreign investors in The Philippines, Malaysia, Thailand, Bangladesh.

The UK is to cut import taxes on hundreds more products from some of the world's poorest countries to boost trade links.

The Developing Countries Trading Scheme comes into force in January and builds on a scheme the UK was first part of while a member of the European Union.

Goods such as clothes, shoes and foods not widely produced in the UK will benefit from lower or zero tariffs.

The scheme covers 65 developing countries.

It is on top of the thousands of products which developing nations can already export to the UK without tariffs and will affect around 99% of goods imported from Africa.

The Department for International Trade said the work was part of a wider push by the UK to use trade to "drive prosperity and help eradicate poverty", as well as reduce dependency on aid.

The scheme includes powers to suspend a country on the grounds of human rights or labour violations, as well as for not meeting their climate change obligations.

International Trade Secretary Anne-Marie Trevelyan said: "As an independent trading nation, we are taking back control of our trade policy and making decisions that back UK businesses, help with the cost of living, and support the economies of developing countries around the world.

"UK businesses can look forward to less red-tape and lower costs, incentivising firms to import goods from developing countries."

Many goods, from textiles to fruit, in 65 of the world's poorest nations already benefit from reduced or zero tariffs when sold to the UK, making them more appealing.

The new scheme cuts some of those charges further - for example, on cucumbers which can not be produced here during the winter.

It also simplifies the rules for which items, such as some textiles, qualify for preferential treatment.

The changes could save importers millions of pounds - although, even if passed on in full, the price savings for consumers may be marginal.

Coming when aid to developing countries has been reduced, the scheme underlines a government policy of using trade instead.

The scheme removes some seasonal tariffs on products like cucumbers, which cannot be grown in the UK in the winter, so they are tariff-free during this period for the majority of countries under the scheme.

It also simplifies trade rules such as rules of origin, which dictate what proportion of a product must be made in its country of origin.

Mohammed Jabbar, managing director of DBL Group, a textile business from Bangladesh, said this was a "game changer" for his company.

"[The changes] mean we will be able to source our cotton from many more countries than we could before, which will make the business more competitive and our supply chains a lot more resilient," he said.

Steppe Gold Limited (TSX: STGO) (OTCQX: STPGF) (FSE: 2J9) ("Steppe Gold" or the "Company") is pleased to announce its financial results for the three months ended June 30, 2022.

Second Quarter Highlights (all figures in US$000's unless stated otherwise)

Revenue for the three months ended June 30, 2022, was $17,237 on sales of 8,907 gold ounces and 717 silver ounces with average realized prices per ounce of $1,933 and $22 respectively.

Operating income from mine operations, before depreciation and depletion was $9,950.

Consolidated group adjusted EBITDA for the quarter was $7,939.

Site All in Sustaining Cost was $811 per ounce sold for the three months ended June 30, 2022.

During the three months ended June 30, 2022, 502,572 tonnes of ore were mined and 237,603 tonnes of ore were stacked on the leach pad with an average gold grade of 2.04 g/t and an average silver grade of 12.17 g/t.

As at June 30, 2022, cash and restricted cash amounted to $40,384; total bank and other debt (excluding convertible debentures) was $51,562 and net debt was $11,178.

The construction and installation of the new fixed crushing unit is expected to be completed by September 2022. This is the first major equipment installation for Steppe Gold's Phase 2 Expansion, which will also allow the Company to drive higher crushing rates in the remaining oxide phase.

Major ongoing works include the fuel storage and camp expansion. Plant design for Phase 2 is scheduled to commence soon.

Ramp-up at Phase I continues with July gold production of 3,693 oz.

Outlook

The focus for the balance of 2022 will be on maximizing gold production from the leach pad and continuing to work on operational efficiencies and strengthening supply chain logistics at the ATO Gold Mine.

The Company has built up a significant inventory of precious metals and is working hard to maximize the yield from this inventory. With planned revenues from gold production for the balance of 2022, the Company aims to reduce or refinance its debt obligations in 2022 and progress discussions on project financing for the Phase 2 Expansion that is already underway.

The Company's consolidated financial results for the three months ended June 30, 2022 have been filed on SEDAR. The full version of the condensed interim consolidated financial statements and associated management's discussion & analysis can be viewed on the Company's website at www.steppegold.com or under the Company's profile on SEDAR at www.sedar.com.

The officials of the Ministry of Digital Development and Communications of Mongolia held a virtual meeting with the officials of the National Aeronautics and Space Administration (NASA).

Due to global warming and climate change, the ecological balance is lost and the frequency of natural disasters is increasing. Therefore, there are needs such as conducting detailed research in this area in combination with space technology, making situation assessments based on many years of quantitative data, and predicting potential risks. Therefore, our country will receive NASA's support for research in this area. Moreover, the sides agreed to implement joint programs to upskill Mongolian specialists in space research.

The Ministry of Digital Development and Communications actively develops cooperation with NASA, the Russian State Space Corporation (Roscosmos), the Asia-Pacific Space Cooperation Organization (APSCO), and the Indian Space Research Organization (ISRO).

Prime Minister of Mongolia L.Oyun-Erdene, Governor of the Capital City and Mayor of Ulaanbaatar D.Sumiyabazar along with related authorities worked in the locations of ger area redevelopment that is being implemented in Ulaanbaatar. According to the results of the first half of 2022, 20,536 households in 19 locations have been involved in ger area redevelopment.

In Bayanzurkh District, the ger area redevelopment is being implemented in four locations out of six locations. As part of the project, 609 households received their apartments in the first phase, and 550 more apartments will be put into use in the further. In Songinokhairkhan District, 199.6 hectares of land in seven locations will be redeveloped and six project implementers have started their work in seven Khoroos. The project implementers have built and put into use 15 blocks for 846 households.

Governor of the Capital City and Mayor of Ulaanbaatar D.Sumiyabazar said, "In accordance with the duties instructed by the Prime Minister of Mongolia, large-scale construction is being carried out within the framework of the objective of reducing traffic congestion and decentralization of the capital city. Developments that are not implemented during the years of the Covid-19 pandemic have begun this year. We believe that the main basis of any work and success is organization. Therefore, in order to reduce traffic congestion, road repair and maintenance, building highways, public transport fleet renovation, and increasing access to schools and kindergartens are being carried out according to the plan. Particular attention to improving the quality of life of the population of Ulaanbaatar, providing them with the opportunity to live in a healthy and safe environment, and achieving unified standards are being paid. The capital city intends to implement Singapore's experience and housing policy in the ger area redevelopment, and bring out the correct planning of mortgage loans and capital sources. Ulaanbaatar will cooperate with Singapore in bringing urban planning to one standard.”

Since the implementation of the ger area redevelopment started, as of 2021, apartments for 11,755 households have been put into use in 19 locations in the ger area, and more than 5,000 chimneys in the ger area have been removed. It is characterized by the fact that schools, kindergartens, and medical buildings are built and put into use in accordance with the standards within the ger area redevelopment.

CAPITAL CITY TRAINING, RESEARCH, AND PUBLIC RELATIONS AGENCY

In the first seven months of this year, about 4.5 thousand borrowers received mortgage loans worth about MNT 355 billion through the funding sources of the Bank of Mongolia and commercial banks. In addition, mortgages worth MNT 71.7 billion are being disbursed in August this year, reported the Bank of Mongolia. Last year, 13.5 thousand borrowers were given mortgage loans worth MNT 1 trillion in total.

With a view to alleviate the financial hardship posed by COVID-19 pandemic, the mortgage repayment deferrals have been made five times between April, 2020 and the end of 2022 according to the Law on Prevention, Combat, and Mitigation of Social and Economic Impacts of the COVID-19. For the last or fifth deferrals on mortgage repayment, commercial banks allowed to postpone the repayment of 63,171 borrowers in total based on their requests.