Income tax

Indonesia to impose VAT and income tax on crypto assets from May

JAKARTA, April 1 (Reuters) – Indonesia plans to charge value added tax (VAT) on crypto asset transactions and an income tax on capital gains from such investments at 0.1 % each, starting May 1, a tax official said Friday. amid a boom in digital asset trading.

Interest in digital assets has surged in Southeast Asia’s largest economy during the COVID-19 pandemic, with the number of crypto asset holders rising to 11 million by the end of 2021.

Total crypto asset transactions last year in commodity futures markets reached 859.4 trillion rupees ($59.8 billion), more than 10 times the value of transactions in 2020, according to data from the Commodity Futures Trading Regulatory Agency.

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Indonesians are allowed to trade crypto assets as a commodity, but not to use them as payment.

“Crypto-assets will be subject to VAT because they are a commodity as defined by the Ministry of Commerce. They are not a currency,” the official, Hestu Yoga Saksama, said during a press briefing. “So we will impose income tax and VAT.”

The government is still working on tax enforcement regulations, he added.

The VAT rate on crypto assets is well below the 11% levied on most Indonesian goods and services, while income tax on capital gains, at 0.1% of gross transaction value, corresponds to that on equities.

Officials said a far-reaching tax law passed last year formed the legal basis for taxes on crypto assets. This law aimed to optimize the collection of revenue affected by the consequences of the COVID-19 pandemic. Read more

($1 = 14,367 rupees)

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Reporting by Stefanno Sulaiman; Editing by Gayatri Suroyo and Clarence Fernandez

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