On 1 May 2022, the tax on crypto asset transaction in Indonesia has come into effect. The Government has noted the large number of transaction value on crypto asset in Indonesia, reached IDR859,4 trillion (USD59.8 billion) in 2021. Therefore, the Ministry of Finance (“MoF”) has issued MoF Regulation No. 68/PMK.03/2022 on VAT and Income Tax on Crypto Assets Trading Transactions.

The reasons behind this new regulatory regime are because:

1. crypto asset is considered as a commodity so that it shall be included as the object of VAT; and
2. profit from crypto asset transaction is considered as additional economic capability so that it shall be included as the object of income tax.

In regards to the detailed tariffs for VAT and income tax on crypto transactions, please find the information in the table below.

The VAT Tariffs

The Income Tax Tariffs

Exemptions

A crypto asset seller will be exempted from the income tax obligation if the seller is a foreign taxpayer domiciled in the country that has obtained Double-Taxation Avoidance Agreements with Indonesia in which the right to collect the income tax is not located in Indonesia.

Additionally, the income tax shall be collected and reported by the Operators of Trade through Electronic Systems. However, this Operators will be exempted from this obligation if it only provides e-wallet services, only bring together the sellers and the buyers, or does not facilitate any crypto asset transactions.

Should there be any queries to this regulation or to find out if this affects your business or personal interest, please do not hesitate to contact us.