- Indonesia has set income tax on crypto gains and value-added tax on crypto purchases.
- The director of tax regulations said they will impose the tax on May 1.
- The country views crypto assets as a commodity.
The Indonesian Directorate General of Taxes of the Ministry of Finance decided to tax income (PPh) on capital gains from crypto investments and value-added tax (VAT) on crypto purchases at 0.1%.
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Hestu Yoga Saksama, director of tax regulations for the Ministry of Finance, also confirmed the decision. The director of tax regulations told CNN Indonesia Friday:
“That’s right, 0.1% PPh and 0.1% VAT (for crypto), all of which are final.”
Saksama also said that both the income tax on capital gains from crypto investments and VAT on crypto purchases will begin on May 1.
The central bank, Bank Indonesia, and the Ministry of Trade also consider crypto a commodity, not a means of payment. This is why the Indonesian government levied income tax and VAT on crypto purchases.
“Crypto assets will be subject to VAT because they are a commodity as defined by the trade ministry. They are not a currency … So we will impose income tax and VAT,” Saksama clarified.
Moreover, Yon Arsal from the Ministry of Finance for Tax Compliance, said the collection of crypto taxes is comparable to buying shares on exchanges. There will be groups who will deduct or accumulate taxes from investors.
Meanwhile, Indonesia is still forbidding cryptocurrency as a means of payment in the country. Yet, as long as people use cryptocurrencies as an investment or commodity, they can freely buy and sell their crypto assets.
In other news, Reuters reported that the VAT rate on crypto is well beneath the 11% levied on most goods and services in Indonesia. The 0.1% income tax on capital gains equals that on shares listed on the Indonesian stock exchange.
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