Indonesia to impose tax on crypto assets from next month

Indonesia will attract Value Added Tax (VAT) on crypto asset transactions and an income tax of 0.1 percent on capital gains from such investments from next month. Trading in digital assets had increased significantly during the pandemic in Southeast Asia’s largest economy. At the end of last year, the number of people holding cryptocurrency assets had grown to around 11 million.

Data from the Commodity Futures Trading Regulator shows that crypto asset transactions in the commodity futures market grew more than 10 times in the past year. According to a Reuters report, people in Indonesia are allowed to trade crypto assets as a commodity but cannot be used as a means of payment.

“Crypto assets will attract VAT as it is not a currency but a commodity as per the trade ministry’s definition. VAT and income tax will be levied on it,” Tax Officer Hestu Yoga Saksama said. He said that the government is working on implementing the regulation to levy the tax. The VAT rate on crypto assets is much lower than the 11 percent that is levied on most goods and services in Indonesia. Income tax on capital gains will be 0.1 per cent of the gross transaction value, which is the same as that of shares. Officials say the tax law passed last year is the basis for taxing crypto assets. The goal of this law was to increase revenue.

The tax on profits from trading cryptocurrencies has come into force in India from the beginning of this month. A law related to crypto was proposed in this year’s budget and it was passed in Parliament. With this, virtual digital assets will come under the tax net in the country. However, there is confusion regarding the definition of virtual digital assets. Profits from crypto trading will be taxed at 30 percent. Apart from this, TDS of one percent has also been implemented on every crypto transaction. Violators of these rules can be in trouble. Violators of the new crypto law can be imprisoned for up to seven years. Laws have been implemented for virtual digital assets in the country, despite opposition from many people associated with the crypto industry.

(This news has not been edited by NDTV team. It has been published directly from Syndicate feed.)