• Sat. May 21st, 2022

Indonesia to introduce VAT and income tax on cryptocurrency transactions

ByHazel R. Lang

Apr 4, 2022

From May 1, Indonesia will start levying Value Added Tax (VAT) on transactions with crypto-assets and income tax on capital gains from such investments. Either way, the rate will be 0.1%, a spokesperson for the country’s Internal Revenue Service said in an interview with Reuters.

The agency levies a similar tax on stock market transactions, while transactions involving physical goods in Indonesia are subject to an 11% VAT.

Legislation equates digital currencies with commodities, but prohibits their use as a means of payment.

According to the local Commodity Futures Trading Regulatory Agency, in 2021 the total trading volume with cryptocurrencies in the derivatives markets reached 859.4 trillion rupees ($59.8 billion). Over the year, the indicator has increased more than tenfold.

By the end of 2021, the number of crypto investors in the country reached 11 million. The indicator’s growth driver was the COVID-19 pandemic. According to a study by Jump Capital, Indonesia has become one of the most promising countries for cryptocurrencies.

Earlier, the country’s Central Bank announced its intention to issue a CBDC, which will become legal tender.

Reminder, to the development of the taxation of crypto-currencies launched in Indonesia in May 2021.

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