Yet another country has passed tax rules for the crypto market. After India created a 30% tax for digital currencies, Indonesia announced a new tax for crypto-income.
According to the director of tax regulations at the Ministry of Finance, Hestu Yoga Saksama, Indonesia classifies digital currencies as a commodity.
In an interview with CNN Indonesia, the director said that cryptocurrencies are not a means of payment and should suffer value-added tax (VAT) taxation.
Indonesians will have to pay 0.1% tax on cryptoasset gains. The rate is the same as the rate charged by the country for revenues reported in income tax.
Cryptocurrencies will be taxed starting May 2022
Taxation for digital currencies will soon be in effect in Indonesia, starting May 1, 2022. In addition to VAT, investors may pay income tax, as stated in the country’s tax laws.
“Cryptoassets will be subject to VAT because they are a commodity defined by the ministry of commerce. They are not a currency…. So we will impose income tax and VAT.”
The approval of the new tax legislation for cryptoassets in Indonesia features a much lower levy than the deemed value for other commodities. While digital currencies will suffer a 0.1% incidence on income, additional items can pay up to 11% VAT in the country.
On the other hand, India recently approved an even higher tax for cryptoassets. So in total, Indian crypto market investors will have two taxes.
The first is a 30% tax that must be paid on transactions with digital currencies, and the amount cannot be deducted from income tax. In addition, starting in July 2022, India plans to levy a 1% tax on cryptoasset transactions, which must be withheld at source.