Indonesia’s Crypto Tax Shock: 0.21% Domestic and 1% Offshore Rates Start August 2025
Indonesia is making waves in the cryptocurrency world with a dramatic overhaul of its tax policies. Starting August 1, 2025, the country will implement significantly higher crypto taxes, targeting both domestic and offshore transactions. This move comes as Indonesia seeks to regulate its rapidly growing crypto market while addressing tax revenue shortfalls.
Indonesia Crypto Taxes: What’s Changing?
The new tax framework introduces several key changes:
- Domestic exchange transaction tax increases from 0.1% to 0.21%
- Offshore platform tax jumps from 0.2% to 1%
- Digital assets reclassified from commodities to financial instruments
- VAT for crypto buyers eliminated (previously 0.11%-0.22%)
- Mining tax doubles from 1.1% to 2.2%
Why the Crypto Tax Hike?
The Indonesian government’s decision comes amid surging crypto adoption but declining tax revenue. Between July 2023 and June 2024, Indonesia recorded $157.1 billion in crypto inflows – more than any other country in the Central & Southern Asia and Oceania region. However, crypto tax revenue fell by 63% in 2023 as traders increasingly used offshore platforms to avoid higher domestic fees.
Impact on Offshore Crypto Tax Compliance
The 1% tax on cross-border transactions represents the most significant change in the new framework. Legal experts warn that enforcement will be challenging due to:
- The decentralized nature of cryptocurrencies
- Reluctance of offshore platforms to comply without mandates
- Difficulty tracking peer-to-peer transactions
Crypto Mining Tax Changes
Mining operations face increased costs with:
- Tax rate doubling to 2.2%
- Special 0.1% income tax on mining to be phased out by 2026
- Mining income shifting to standard tax brackets
What This Means for Traders and Investors
While the removal of buyer VAT benefits new investors, the overall tax increases may:
- Discourage frequent trading
- Push more activity to offshore platforms
- Increase compliance costs for local exchanges
Frequently Asked Questions
When do Indonesia’s new crypto taxes take effect?
The new tax rates will be implemented starting August 1, 2025.
How much is the tax for domestic crypto transactions?
Domestic exchange transactions will be taxed at 0.21%, up from the previous 0.1% rate.
What’s the tax rate for offshore crypto platforms?
Transactions on offshore platforms will be taxed at 1%, a significant increase from the previous 0.2% rate.
Is there still VAT on crypto purchases?
No, the government has eliminated value-added tax (VAT) for crypto buyers, which previously ranged between 0.11% and 0.22%.
How will this affect crypto mining in Indonesia?
Mining operations will see their tax rate double from 1.1% to 2.2%, with additional changes coming in 2026 when mining income moves to standard tax brackets.
