Indonesia has announced that they plan to apply value added tax (what we know in Spain as VAT) to crypto asset transactions, and an income tax on capital gains from such investments of 0,1 percent each. It will start to be applied from May 1or, a tax official commented on Friday, in the midst of a boom in digital asset trading.
Interest in digital assets has grown in Southeast Asia during the coronavirus pandemic. COVID-19. There are at least 11 million cryptocurrency asset holders as counted at the end of 2011 Jan market. Very likely, the fact that there are state taxes will take away a lot of interest from the purchase and investment of crypto assets, with which their activity may drop considerably.
Indonesia will regulate cryptocurrencies with taxes on their purchases
Last year, total crypto asset transactions in commodity futures markets reached 859.400. million dollars. This increase means an increase of more than 10 times the value of transactions from 2020, according to data from the Commodity Futures Trading Regulatory Agency.
It is understandable that given this movement of money, Indonesia wants to regulate it. As announced, Indonesians will be allowed to trade crypto assets as a commodity in itself. But they cannot be used as a means of payment. The government is still working on the tax application regulations.
The VAT rate on crypto assets is well below the 11 percent applied to most Indonesian goods and services. On the other hand, the income tax on capital gains, at 0,1 percent of the gross value of the transaction, matches that of the shares. Indonesian officials said a sweeping tax law passed last year was the legal basis for taxes on crypto assets. This law was intended to optimize revenue collection affected by the aftermath of the COVID-19 pandemic.
The arrival of taxes on purchases of crypto assets may discourage merely speculative purchases, since they will greatly reduce the profit margin and all movements with them will be registered and must be declared. But seeing the enormous amount of money they moved, it was understandable that the government wanted to regulate them to prevent fraudulent uses of crypto assets.
