Indonesia is preparing to update its tax framework for crypto assets following the reclassification of crypto as a financial instrument, shifting it away from its previous status as a commodity. The change comes after regulatory oversight of the crypto industry moved from the Commodity Futures Trading Regulatory Agency (Bappebti) to the Financial Services Authority (OJK).
According to Director General of Taxes, Bimo Wijayanto, the shift requires changes in the applicable tax rules to match crypto’s new classification. As he stated in a press conference on July 22, 2025:
“We used to regulate crypto as part of commodities. Now, as it becomes a financial instrument, the rules must be adjusted,” said Bimo.
One of the central implications of this transition is the potential elimination of Value-Added Tax (VAT or PPN) on crypto transactions, which would align crypto with stocks, mutual funds, and bonds—financial products that are currently not subject to VAT under Indonesian law.
Read omore: Indonesia’s Crypto Tax Revenue Surpasses IDR 1 Trillion
Existing Tax Framework Remains in Force
Until new regulations are officially introduced, Indonesia continues to apply PMK No. 68/2022, which governs tax obligations on crypto transactions based on its previous classification as a commodity. The policy includes:
- Income Tax (PPh):
- 0.1% final income tax for transactions via government-approved platforms.
- 0.2% if the transaction is conducted on platforms without such approval.
- Value-Added Tax (PPN):
- 0.11% if facilitated by a registered physical crypto trader.
- 0.22% if not.
These taxes are imposed on various transaction types, including direct purchases, digital asset swaps, and transfers to other accounts. VAT collection must be reported using SPT Masa PPN 1107 PUT, and income tax also applies to crypto mining and platform income.
According to government records, the crypto industry has contributed Rp 1.2 trillion in tax revenue between the introduction of PMK 68 in May 2022 and the first quarter of 2025. This contribution underscores the growing fiscal importance of crypto in the national economy.
Reform Objectives and Industry Implications
By removing VAT from crypto transactions, Indonesia would simplify tax compliance and reduce transaction costs. This step would make the tax structure more consistent with the treatment of financial assets in other markets and help address current complexity in tax reporting—particularly for licensed exchanges and digital asset service providers.
Although no detailed policy proposal or implementation timeline has been disclosed, DJP has confirmed the ongoing revision process. The government faces the challenge of maintaining tax revenue while ensuring a more efficient regulatory framework.
Indonesia’s position contrasts with crypto-friendly jurisdictions like Singapore and Hong Kong, which do not apply VAT to crypto trades and have clearer tax guidelines. Without reform, Indonesia risks becoming less attractive for regional and global digital asset companies.
Market Perspective and Local Insight
The reclassification signals the government’s intention to treat crypto as part of the broader financial system. While investors and platforms await formal policy updates, the current direction suggests a shift toward streamlined taxation and greater regulatory clarity.
For companies operating in or entering the Indonesian market, understanding the evolving legal and tax landscape is critical.
Indonesia Crypto Network (ICN) supports digital asset companies in navigating regulatory shifts, building local partnerships, and entering the market with a clear understanding of compliance expectations. As Indonesia refines its approach to crypto taxation, access to trusted local expertise will be key to successful market engagement.
Read more: Insights on Indonesia Crypto Industry Growth 2024: Tax Revenue, Transaction Volume, and User Growth
