Indonesia Hits Foreign Crypto Trades with 1% Tax Blow | Image Source: www.globalvatcompliance.com
JAKARTA, Indonesia, July 30, 2025 – In a historic change that could reshape the growing digital asset landscape in Southeast Asia, Indonesia has revealed a comprehensive review of its cryptographic tax policy. On 1 August 2025, the Ministry of Finance Regulation No. 50/2025 uses long-standing value added tax (VAT) on cryptomoneda transactions in a new era, while taxes are imposed simultaneously on hiking incomes, particularly on foreign platforms and critical miners.
This regulatory hub is derived from a key reclassification: now cryptographic assets are officially recognized as values. According to Bimo Wijauanto, Director General of the Ministry of Finance, the old VAT framework no longer applies to digital assets in this context. On the other hand, the government has introduced a refined income tax system that transfers the tax burden of buyers to crypto-related suppliers and service providers.
What motivated Indonesia to claw VAT on cryptographic goods?
At the heart of the reform is a redefinition. Crypto’s assets, once grouped with goods, are now considered values, a classification that has significant regulatory consequences. According to Bimo Wijanto, this amendment invalidates the application of VAT, which traditionally applies to goods and services but not to securities.
“VAT no longer applies because critical assets now meet the characteristics of values”
he said, during a press briefing held at the Directorate General of Taxes headquarters on July 31, 2025.
The Indonesian government reduced 0.11% of VAT on cryptographic transactions via registered platforms and 0.22% on unregistered platforms. This movement is seen as a step towards aligning the taxation of digital assets with conventional financial instruments, providing legal certainty and alignment with international cryptographic regulatory practices.
How are cryptographic transactions now imposed by the new law?
Instead of VAT, the government has improved its income tax approach. Vendors of cryptographic assets on registered national platforms now face a final income tax (article 22 of the Penal Code) of 0.21%, up to 0.1%. For transactions on foreign platforms, this rate increases to 1%. This differential tax is aimed at attracting users to domestic suppliers and strengthening the local digital economy.
Tax Regulatory Director I Hesu Yoga Saksama explained the rationale:
“If you use a foreign platform, the tax is 1%. If you use a servant, it’s only 0.21 percent. This has been proposed by the Financial Services Authority (OJK), and we support it as a means of promoting local actors. “
These types of taxes apply to e-system-based commercial service providers (ESSPs) – digital brands that facilitate online commerce through communication technology platforms. National and international PMSCs are expected to collect and transmit these taxes accordingly.
What changes affect cryptographic miners and platform service providers?
Crypto miners do not escape from the regulation. VAT for cryptographic extraction services doubled from 1.1% to 2.2%. In addition, the government repealed the previously reduced excise tax rate on revenues of 0.1% for cryptographic extraction, thereby transferring these revenues to the ordinary 2026 tax groups of individuals or corporations.
The scope of VAT has also been extended. According to PMK No. 50 / 2025, any service that supports cryptography exchange – including portfolio operations, user interface platforms and deposit/retirement mechanisms – will be charged to the current 12% VAT on fees or charges. The emphasis is clearly placed here: while cryptographic assets are exempt, the infrastructure and economy of services surrounding them are now totally imponible.
The rules of procedure read as follows:
“Minors who do not comply with the provisions are subject to sanctions governed by general provisions and legislation on tax procedures. ”
How did the cryptographic industry respond to the new financial framework?
The reactions of the Indonesian cryptographic industry were mixed. Tokocrypto, an exchange supported by Binance, welcomed the clarity of the regulation but called for a transitional grace period. In its public statement, Tokocrypto expressed concern about the brutal implementation and competitive disparity created by higher tax rates than traditional financial markets.
“We also stress the importance of strengthening the monitoring and taxation of cryptographic asset transactions through foreign platforms”
the company noted.
Industry stakeholders are also calling for tax incentives to stimulate innovation and technological growth in the local digital financial sector, especially given the higher tax burden than equity investments. As share capital gains continue, they are taxed at a rate below the newly introduced income tax of 0.21% and 1% on cryptometric transactions.
What does that mean for cryptographic investors in Indonesia?
The Regulations radically change the tax responsibilities of the various stakeholders. Buyers, who were previously responsible for VAT, are now exempt. On the other hand, the burden lies entirely with the sellers and the platforms or services that facilitate the ecosystem.
This is a major victory for retail investors and daily users who market small volumes and previously had to pay VAT and income tax. However, for large-scale suppliers, institutional miners and foreign service providers, this reform includes higher compliance costs and operational complexities.
Moreover, users of platforms abroad will now have to take into account a 1% tax, a substantial increase that could trigger a capital flight, depending on how Indonesia strictly implements the declaration and compliance between offshore trade.
Why does Indonesia target foreign cryptometric platforms more strongly?
The differential tax system is a strategic move. By making it more expensive for trade through foreign platforms, Indonesia is committed to intensifying its activities within its borders. Increasing taxes on offshore suppliers plays a deterrent and incentive role: discouraging capital outflows and increasing the competitiveness of national platforms.
According to the Ministry of Finance, this initiative is consistent with broader national strategies to protect digital sovereignty, improve monitoring and traffic of funnel users to locally regulated suppliers. This plays a role in data security, transparency and the promotion of fintech innovation at home.
What is the importance of the Indonesian cryptographic market and what is at stake?
Indonesia’s cryptographic boom is no longer on the band – it’s the main current. According to regulatory data, the total volume of transactions in 2024 reached more than Rs 650 billion (approximately $39.67 billion). This is almost three times the 2023 figure, and the country now has more than 20 million registered cryptographic users, exceeding the number of traditional investors on the stock market.
This rapid but encouraging growth has raised concerns about the need for stricter regulation, better tax enforcement and clearer legal frameworks. Together with Finance Minister Sri Mulyani Indrawati, stressing the importance of regulatory adaptation, the new rules are a sign that the government is determined not to fall back on the curve.
“In order to ensure legal certainty for transactions in cryptographic assets and to adapt to developments in the trade in cryptographic assets, the tax provisions must be adapted”
the minister stated in Regulation 50/2025’s introduction.
But certainty comes with a price. Increasing taxes – particularly for offshore actors – could change user behaviour, and potentially push certain clandestine activities or towards decentralised exchanges (DEX), which are more difficult to regulate.
The challenge for Indonesia will be to maintain this regulatory balance: promote innovation while ensuring respect, promote local actors without alienating global partnerships and protect retail users while fostering institutional growth.
As dust is laid after 1 August, the crypt community in Indonesia and beyond will closely monitor the implications – for budget planning, investment flows and long-term industrial development.
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