Indonesia will levy Income Tax on top of capital gains.
Indonesia is going to impose a Value-Added Tax (VAT) on crypto-asset transactions and an Income Tax on capital gains from such investments at 0.1% each.
According to a Reuters report, the regime will begin from May 1, a tax official said on Friday.
The crypto boom in the country began in Southeast Asia’s largest economy during the COVID-19 pandemic. Crypto asset holders s jumped to 11 million by the end of 2021 in the country.
Last year’s total crypto-asset transactions in commodity futures markets reached 859.4 trillion rupiah ($59.8 billion), up more than 10 times from 2020’s transaction value, data from the Commodity Futures Trading Regulatory Agency showed.
“Crypto assets will be subject to VAT because they are a commodity as defined by the trade ministry. They are not a currency,” the official, Hestu Yoga Saksama, told a media briefing. “So we will impose Income Tax and VAT.”
The government is still working on implementing regulations for the taxes, he added.
Indonesians are allowed to trade crypto assets as a commodity but not to use them as a currency or means of payment.
The VAT rate on crypto-assets is well below the 11% levied on most Indonesian goods and services, while the income tax on capital gains, at 0.1% of gross transaction value, matches that on shares.
Officials explained that a wide-ranging tax law passed last year was the legal basis for taxes on crypto assets. That law aimed to optimise revenue collection hit by the aftermath of the COVID-19 pandemic. On the other hand, India has opted for a stringent tax regime.
News recommendation: Metaverse Market Could Grow to $13T by 2030: Citi