Crypto assets in Indonesia are so popular recently that the government must regulate crypto taxes.
Currently, crypto taxes have been in effect in Indonesia since May 1, 2022, to be precise.
This tax regulation on crypto has also been implemented in several countries, including the United States and the United Kingdom.
So, what is crypto tax, and how do you pay it?
Check out the full review below!
What Is Crypto?
Crypto is a digital asset that uses cryptographic technology. This cryptographic technology also guarantees that this crypto cannot be counterfeited.
This can happen because crypto is made centrally on a technology system or blockchain network.
Thus, the way it works is, of course, digital-based, which is encrypted and decentralized.
Crypto in Indonesia has yet to become a legal and official means of payment, as stated in Law Number 7 of 2011 concerning Currency.
Even so, crypto is currently recognized as a commodity and is under the supervision of the Commodity Futures Trading Regulatory Agency (Bappebti).
In summary, crypto in Indonesia has only been an investment asset/instrument.
Why Is Crypto Important to Be Taxed?
So, why is it necessary to impose or collect taxes on crypto?
For information, crypto assets have become a source of income for many people in several countries.
That then becomes why crypto assets, including NFTs, must be taxed.
According to Bappebti, implementing this crypto asset tax is important because it can incentivize investors to enter the country’s crypto market, especially foreign investors.
How Does the Government Regulate Crypto Taxes?
The Indonesian government has regulated the imposition and receipt of crypto taxes through the Minister of Finance Regulation (PMK), namely PMK 68/PMK.03/2022.
The PMK is a technical implementation regulation under the legal umbrella of the Law on the Harmonization of Tax Regulations (UU HPP).
The issuance of this regulation took into account the ongoing growth of crypto asset investment in Indonesia, both in terms of transaction value and the number of investors.
What Types of Taxes Apply to Crypto?
Meanwhile, the types of taxes imposed on crypto asset profits are Income Tax (PPh) article 25/29 and Value Added Tax (VAT).
To note, PPh 25 is a gradual payment of income tax.
The aim is to ease the burden on taxpayers (WP), individuals, and business entities.
The breakdown of the tax amount is that PPh is subject to a rate of 0.2%, while VAT is 0.22%.
How to Pay Crypto Taxes in Indonesia?
Regarding how to pay it, the imposition of crypto tax in Indonesia is carried out by appointing a third party who will become the VAT collector for trading crypto assets.
The third parties appointed are Trade Operators Through Electronic Systems (PPMSE) at home and abroad.
For your information, PPMSE is a taxpayer who has been confirmed as a Taxable Entrepreneur (PKP).
Apart from that, PPMSE must also collect Income Tax Article 22 for the said crypto asset transaction.
On the other hand, parties subject to crypto tax apply as crypto tax subjects are sellers of crypto assets, PPMSE, and Crypto Asset Miners (bitcoin mining).
Then, crypto VAT subjects alias those subject to VAT on crypto asset transactions, namely crypto asset buyers and crypto asset sellers.
What Penalties Will Be Received for Not Paying Crypto Taxes?
As mentioned above, the type of tax imposed on profits from crypto is Income Tax (PPh) article 25/29.
The deadline for paying PPh Article 25 is the 15th of the following month from the tax period to be paid.
If you are late paying this one tax, any delay in depositing and reporting PPh Article 25 will be subject to sanctions in the form of interest of 2% every month from the due date until the Taxpayer pays off the tax.
Conclusion
Effective in Indonesia since May 1, 2022, the crypto tax is important because it can incentivize investors to enter Indonesia’s crypto market, especially foreign investors.
The government officially regulates the imposition of crypto taxes through the Minister of Finance Regulation (PMK), namely PMK 68/PMK.03/2022.
Meanwhile, the types of taxes collected from crypto transactions are Article 25/29 Income Tax (PPh) (0.2%) and Value Added Tax or VAT (0.22%).
It is also important to understand that in an era where the crypto world is increasingly developing, awareness of the importance of crypto taxes needs to be continuously increased so that it can help build a better and more sustainable crypto ecosystem in the future.
Beyond that, for those who want to invest in crypto, let’s check and monitor the first crypto asset coin market on Indodax.
Happy investing!
