Talking about NFT and cryptocurrencies, there does not seem to be a single country that can dodge the grasp of those digital assets, including Indonesia. Certainly, the rise of this phenomenon in the country caught the attention of the taxation authority. This causes confusion among enthusiasts regarding the cryptocurrency and NFT tax in Indonesia. If you happen to be in this position, read on to get a clear view.
The short answer to that question is yes, every crypto investor in Indonesia must pay taxes on their cryptocurrency transactions. This regulation has just been officially applied by the taxation authority on May 1.
In Indonesia, the presence of cryptocurrency may have yet to be recognized as a legal currency to perform conventional daily transactions. However, the Ministry of Trade has classified it as a commodity. Also, it is supervised under the regulation of the Commodity Futures Trading Supervisory Agency.
Surely, this tax imposition generates pros and cons among the national crypto nft community. More importantly, regarding the transaction fee the investors must pay, which increased by 0.21% with the following details:
The 0.21% tax rate is believed to be a bit affordable since the transaction is conducted on Commodity Futures Trading Supervisory Agency-regulated marketplaces. If the trading is performed on an unregulated platform, traders may be subject to the conventional income tax rate.
Locat crypto investors, on the other hand, have reacted positively to the implementation of crypto taxes. CEO of Indodax, Oscar Darmawan, said that this regulation could strengthen the legitimacy of crypto as an acknowledged and legally exchanged digital commodity. In addition, enacting the said regulations provide legal protection over the ownership of investors' crypto assets.
Crypto tax regulations in Indonesia are still in their infancy phase. Therefore, many local investors hope the tax rates could be reduced as the law is imposed. It's deemed necessary to allow the country's digital economy efforts to continue to increase in the midst of the crypto investment boom.
Topic about digital asset tax never fails to make headlines. In addition to crypto tax regulations, the NFT Tax Indonesia has also been a talking point among the local community of non-fungible assets.
As you probably have understood, creating an NFT is not considered a taxable activity. However, it's a whole different thing if you carry out the following NFT-related activities:
Suppose you conduct one of the activities above as an investor or creator. In that case, you may have met the requirements for being subjected to taxation. However, it may not be classified as an NFT tax but rather as an income tax. Still, it depends on each region's tax regulations since each country imposes different policies.
In Indonesia, the central authority has yet to announce the implementation of particular NFT tax provisions. However, those who are engaged in the NFT transactions (creators and investors) are still classified as taxpayer subjects should they meet the existing requirements to pay taxes.
In general, all NFT-based income obtained in Indonesia falls within the income objects, which can also be tax objects. This actually refers to the very principle of a substance above form. It means the revenue from the NFT transaction will be subject to income tax as long as the nature of the NFT transaction can boost the taxpayer's economic capability.
According to the Directorate General of Taxes, digital assets such as NFTs must always be included in the Annual Tax Return under the category of investments. So, if you happen to be involved in an NFT transaction in the country, you will be subject to income tax. The rates for annual income tax in Indonesia are as follows:
Suppose you consider yourself a true NFT enthusiast. In that case, you must have heard of Sultan Gustav Al Ghozali or popularly known as Ghozali Everyday. This young man went viral at the beginning of 2022 after making around 1.7 billion rupiahs from selling his four-year selfie compilation as non-fungible tokens on the popular NFT marketplace, OpenSea.
Seeing that astounding success, Ghozali obviously cannot dodge the attention of the taxation authority. This prompted the 22-year-old man to register as an individual taxpayer in order to show that he is a good Indonesian citizen. He is now probably the first Indonesian NFT creator and seller who paid tax from his revenue.
Related Article: Best NFT Marketplace Indonesia For Purchased and Traded
Ghozali and other Indonesian digital asset investors and creators who have previously paid taxes show that the issuance of digital asset tax regulations is not something to be considered an obstacle. Instead, it's something that should be taken into serious consideration prior to making a transaction or investment in a non-fungible asset.
Indonesia has just indeed implemented a tax policy on crypto trading. Let's hope this emerging policy can provide legal protection for Indonesians' digital assets while enabling the country's digital economy to flourish.
In the case of NFT, there has yet to be an official tax policy regulating non-fungible tokens. While Indonesia imposes an income tax on an NFT transaction, the regulation is still unclear. It's due to the unavailability of uniformity regarding how NFTs should be taxed in various countries.
Still, if you just conducted an NFT transaction and acquired a considerable amount of revenue, it would be best for you to include it in your income tax. Don't wait until the taxation authority reaches out to you. Otherwise, you will lose more than you are supposed to pay. That concludes the discussion about cryptocurrency and NFT tax Indonesia, and we hope you found it informative.
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