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Jakarta, Ideatax -- The Commodity Futures Trading Supervisory Agency, or Badan Pengawas Perdagangan Berjangka Komoditi (Bappebti), reported that the number of registered crypto investors in Indonesia in November 2023 reached 18.25 million. Bappebti reported that the average growth of crypto asset subscribers reached 437,900 per month since February 2021 (CNBC, 2023).
In terms of transaction value, Bappebti also said that the value of crypto transactions in Indonesia during the period January to October 2023 reached IDR 104.9 trillion (CNBC, 2023). This amount also places Indonesia as the country with the seventh-largest crypto investment in the world (Liputan 6, 2023). The niche and potential for crypto transactions in Indonesia are still huge. Moreover, Bappebti has inaugurated a crypto exchange in Indonesia.
In mid-2022, the government issued Minister of Finance Regulation Number 68 of 2022 concerning Value Added Tax and Income Tax on Government Crypto Trading Transactions as a tax regulation related to crypto currency transactions. In this regulation, the government, among others, regulates the delivery of intangible taxable goods in the form of crypto assets by crypto asset sellers; the delivery of JKP in the form of services for providing electronic facilities used for crypto asset trading transactions; and JKP in the form of crypto asset transaction verification services and/or mining pool management services are subject to value-added tax.
There are two main parts of the Value Added Tax on crypto asset delivery transactions rate:
- If the crypto asset delivery transaction is performed by an organizer of trading through an electronic system that is a physical trader of crypto assets, the VAT rate imposed is 0.11% of the value of the crypto asset transaction. The effective rate is obtained by multiplying the VAT rate of 11% by the tax base with a certain value of 1%.
- If the crypto asset delivery transaction is performed by a trading organizer through an electronic system that is not a physical trader of crypto assets, an effective VAT rate of 0.22% of the crypto asset transaction value is imposed. The effective rate of 0.22% is obtained by multiplying the VAT rate of 11% by the tax imposition base of 2%.
On the other hand, in terms of income tax, the government also regulates that income received or obtained from the sale of crypto assets, organizing trading through electronic systems, and mining crypto assets are subject to income tax. The amount of income tax on crypto asset sales transactions is 0.1% of the value of crypto asset transactions. Crypto asset transactions performed by an electronic system trading organizer who is not a physical trader of crypto assets get the amount of income tax imposition of 0.2%. In simple terms, the income tax and VAT rates on crypto asset sales transactions can be described in the following matrix:
Compared to other countries, Indonesia's income tax and value-added tax rates are moderate. The UK, for example, imposes an income tax on capital gains from crypto transactions at a rate of 10–20% (CNBC, 2023). On the other hand, Belgium imposes an income tax on capital gains from crypto transactions of 33% (VOI, 2022). France may impose an income tax of 66% on crypto-currency transaction profits (KONTAN, 2021). The comparison of countries with the lowest and highest tax rates can be seen in the following table:
Based on the explanation above, it seems that we have little idea that the effective crypto tax rate imposed in Indonesia is still relatively low compared to other countries. Therefore, implementers and regulators of crypto asset trading need to boost the transaction value and the number of investors of crypto currency.
Reference
CNBC. (2023, Desember 18). Investor Kripto RI Capai 18,25 Juta, Terbesar Ke-7 di Dunia. Retrieved from CNBC: https://www.cnbcindonesia.com/market/20231218105327-17-498142/investor-kripto-ri-capai-1825-juta-terbesar-ke-7-di-dunia
CNBC. (2023, July 25). Pajak Bitcoin Cs di RI Paling Besar Sedunia? Cek Faktanya. Retrieved from CNBC: https://www.cnbcindonesia.com/research/20230725130516-128-457109/pajak-bitcoin-cs-di-ri-paling-besar-sedunia-cek-faktanya
KONTAN. (2021, Maret 4). Ini daftar negara dengan pajak terendah dan tertinggi atas tranksasi uang kripto. Retrieved from KONTAN: https://investasi.kontan.co.id/news/ini-daftar-negara-dengan-pajak-terendah-dan-tertinggi-atas-tranksasi-uang-kripto
Liputan 6. (2023, Desember 18). Bappebti Ungkap Pelanggan Kripto di Indonesia Sentuh 18,25 Juta hingga November 2023. Retrieved from Liputan 6: https://www.liputan6.com/crypto/read/5483924/bappebti-ungkap-pelanggan-kripto-di-indonesia-sentuh-1825-juta-hingga-november-2023?page=2
VOI. (2022, September 09). Ini Lima Negara dengan Pajak Kripto Terburuk di Dunia, Indonesia Tidak Termasuk. Retrieved from VOI: https://voi.id/teknologi/208281/ini-lima-negara-dengan-pajak-kripto-terburuk-di-dunia-indonesia-tidak-termasuk
