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.
Transfer pricing documentation requirements – the Revised GTL requires taxpayers with related party transactions to prepare three-tiered transfer pricing documentation (i.e. Master File, Local File, and Country-by-Country Report) with the exemptions listed below:
A multinational corporation ("MNE") with consolidated group revenue below Mongolian Tughrik ("MNT") 6 billion (approximately USD 2.25 million as of the date of this publication) is exempted from preparing the Master File and Local File; and
An MNE with consolidated group revenue below MNT 7.1 trillion (approximately USD 640 million as of the date of this publication) is exempted from preparing the Country-by Country Report.
Administrative penalties – if transfer pricing documentation is not submitted to the Mongolian Tax Authority when requested, the Tax Authority may impose penalties of 2%-4% of transaction value, in addition to any transfer pricing adjustment.
As the Revised GTL will take effect from January 1, 2020, it is expected that the Mongolian Tax Authority will soon issue transfer pricing implementation guidelines, which are expected to be broadly in line with the OECD Transfer Pricing Guidelines. Therefore, we strongly recommend that MNEs with operations in Mongolia undertake a transfer pricing review and follow the upcoming implementation guidelines to ensure they are able to meet their compliance obligations and manage their overall transfer pricing risk.