Crypto Trading Taxes Hiked in Indonesia, focus on Offshore Platforms
Indonesia is set to impose higher taxes on cryptocurrency transactions starting from August 1, 2022, as announced by the government. This move comes as the cryptocurrency market in the country has seen significant growth, with transaction values tripling in 2024 to over 650 trillion rupiah ($39.67 billion).
Under the new regulations, crypto buyers will be exempted from value-added tax (VAT), marking a reduction from the previous 0.11-0.22% VAT rate. However, sellers will face steeper taxes, with those using overseas exchanges paying a tax rate of 1%, a substantial increase from the prior 0.2% rate. Sellers on domestic crypto exchanges will pay a 0.21% tax on transaction value, up from the previous 0.1% rate.
Cryptocurrency mining will be subject to higher taxation, with VAT rates increasing to 2.2% from 1.1%. A significant change is also expected in 2026, when crypto mining income will be subject to standard personal or corporate tax rates instead of the current 0.1% special income tax rate.
It is important to note that while cryptocurrencies are legal for trading in Indonesia, they cannot be used as payment methods under current regulations. The country now boasts more than 20 million crypto exchange users, surpassing its stock market investor base.
The new finance ministry regulations were reported by Reuters on Wednesday. This move by the Indonesian government is part of a global trend towards regulating the cryptocurrency market more closely. As the cryptocurrency market continues to grow, it is expected that more countries will follow suit in imposing taxes on cryptocurrency transactions.
