Indonesia has become the latest country to levy taxes on cryptocurrency transactions and income.
According to an Indonesian tax official, the nation intends to levy income tax on cryptocurrency revenues as well as value-added tax (VAT) on cryptocurrency-related transactions.
According to the article, bitcoin dealers in Indonesia would be required to pay 0.1 percent for each of the taxes beginning May 1.
According to the article, the VAT rate on crypto assets is lower than the standard 11 percent tax charge on goods and services. However, the taxation on cryptocurrency profits is similar to that of commodities such as stocks.
Saksama further remarked that the administration is still working on putting in place adequate tax legislation.
Meanwhile, the crypto tax legislation is the consequence of a slew of tax measures implemented last year in an effort to boost revenue collections hampered by the COVID-19 epidemic.
Indonesians will be able to purchase and sell crypto assets as commodities in 2021, but not as a form of payment, according to the country’s commerce ministry.
Indonesia is hardly the first government to consider taxing cryptocurrency holdings. As bitcoin continues to gain traction among mainstream consumers, regulators are increasingly concerned about how to interact with the asset class.
India recently enacted taxes on digital assets, which went into effect on April 1. Traders are required to pay 30% of all bitcoin earnings or risk prosecution.
Just this week, Indian tax officials collected $2.3 million from 11 cryptocurrency exchanges, including WazirX, according to Pankaj Chaudhary, Minister of State for Finance.
In France, traders would be required to pay taxes on crypto earnings only after they were converted to cash. Trades between other digital currencies are tax-free, according to the country’s finance minister, Bruno Le Maire.