Indonesia to impose VAT and Income Tax on crypto assets from May

Amid a boom in digital asset trading, Indonesia plans to charge value-added tax on crypto asset transactions and an income tax on capital gains from such investments at 0.1 percent each, starting from May 1.

Indonesians are allowed to trade crypto assets as a commodity but not to use them as a means of payment. The VAT rate on crypto assets is below the 11 percent levied on most Indonesian goods and services, while the income tax on capital gains, at 0.1 percent of gross transaction value, matches that on shares.

Tax Official Hestu Yoga Saksama said, “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.” He further said that the government is still working on the implementing regulation for the taxes.

According to data from the Commodity Futures Trading Regulatory Agency, 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.