Indonesia sees an increased number of crypto trades. As a result, the government plans to impose value-added tax (VAT) on cryptocurrency trades, income, and capital gains from crypto investments.
Indonesia to Impose 0.1% VAT Starting May 1
The Indonesian government wants to impose a 0.1% VAT on all crypto-related transactions starting May 1. At the moment, Indonesians are allowed to trade crypto as a commodity, but they’re not permitted to use it as a payment method.
Additionally, Indonesia’s VAT is way lower than the country’s general sales tax (GST), which is 11%. The income tax will remain the same as the ones for shares – 0.1% of the gross value.
The government officials noted that last year’s tax legislation served as a solid foundation for these crypto taxation regulations.
Following the COVID-19 outbreak in Southeast Asia and the region’s economy, the demand for digital assets grew. The number of cryptocurrency holders hit about 11 million by the end of 2021.
In Indonesia, cryptocurrency assets are defined as commodities and can be traded as such. According to tax official Hestu Yoga Saksama, this is the main reason Indonesia is imposing a VAT.