The government has eliminated the Value Added Tax (VAT) on cryptocurrency transactions while increasing the final income tax (PPh Article 22) rate, as outlined in the newly issued Finance Minister Regulation (PMK) No. 50/2025, which tackes effect on August 1, 2025.

Director General of Taxes at the Ministry of Finance, Bimo Wijayanto, said that the removal of VAT was due to a regulatory shift that now classifies crypto assets as securities.

“VAT is no longer applied because (crypto assets) now meet the characteristics of securities,” Bimo told reporters at the Tax Directorate General headquarters on Thursday evening, July 31, 2025.

To compensate the removal of VAT, the government has raised the final income tax rate on crypto transactions from 0.20 percent to 0.21 percent. This rate applies to transactions conducted through registered physical crypto traders listed under the Commodity Futures Trading Regulatory Agency (Bappebti).

Previously, crypto transactions were subject to VAT of 0.11 percent when executed through Bappebti platforms and 0.22 percent for unregistered platforms. Under the new regulation, VAT is scrapped entirely, and taxation responsibility now falls on service providers or infrastructure supporting the transactions.

“The final PPh Article 22 set under the regulation is 0.21 percent for domestic PPMSEs and 1 percent for foreign PPMSEs or those collected independently,” Bimo said. PPMSE stands for Electronic System-Based Trading Providers − businesses that facilitate online trading through electronic communication systems.

Director of Tax Regulation at the Directorate General of Taxes, I Hestu Yoga Saksama, emphasized that the tax rate differentiation between local and foreign platforms is intended to support Indonesia’s domestic digital economy.

“If you use a foreign platform, the tax is 1 percent. If you use a domestic one, it’s only 0.21 percent. This was proposed by the Financial Services Authority (OJK), and we support it as a way to promote local players,” Yoga said.

As the Minister of Finance Regulation No. 50/2025 is now in effect, the tax burden is solely placed on crypto asset sellers, replacing the previous scheme that required buyers to pay VAT on each transaction.