Tax officials from Indonesia and Australia convened in Jakarta on April 22 to finalise an agreement aimed at establishing a framework for sharing information on cryptocurrencies. Unveiled on April 23, the agreement seeks to enhance the identification of taxable assets in both countries and facilitate the exchange of data related to cryptocurrencies among tax authorities. Additionally, it addresses the importance of complying with tax obligations in the crypto sphere.
Mekar Satria Utama, a director at Indonesia’s Directorate General of Taxes (DGT), emphasised the significance of innovation and collaboration among tax authorities to keep pace with the rapid evolution of financial technologies worldwide. He stressed that while cryptocurrencies are relatively new, ensuring fair taxation remains crucial for fostering economic growth and funding essential public investments such as infrastructure, education, and healthcare.
The collaboration between Australian and Indonesian tax authorities has previously encompassed various priorities of the DGT, including the digitization of taxpayer services through the introduction of a virtual tax assistant and the implementation of value-added tax (VAT) for digital goods and services.
Indonesia has been actively developing regulations for the cryptocurrency sector and has sought partnerships with foreign countries and international organisations to establish a robust regulatory framework. The Financial Services Authority (OJK) of Indonesia has been collaborating with financial regulators in Malaysia, Singapore, and Dubai to lay the groundwork for crypto regulation.
Under a recent ruling, cryptocurrency companies seeking to operate in Indonesia must undergo a regulatory sandbox process before obtaining a licence, effective from January 2025. This regulation aligns with the OJK’s oversight of the cryptocurrency sector, and entities offering cryptocurrency services without completing the sandbox evaluation would be deemed illegal.
Meanwhile, Australia is among several nations collaborating with the Organisation for Economic Cooperation and Development (OECD) to develop the Crypto-Asset Reporting Framework (CARF), which facilitates the automatic exchange of information on crypto-assets. Although not explicitly a bilateral tax treaty, this collaboration aims to standardise cryptocurrency taxation globally, streamline tax procedures, and reduce instances of tax evasion related to crypto earnings.
