On April 22, tax officials from Australia and Indonesia struck a deal in Jakarta to create a framework for exchanging cryptocurrency information.
The goal of this agreement, which was announced on April 23, is to make it easier to identify assets that could be subject to tax in either nation. Additionally, it seeks to facilitate more efficient data and information sharing among tax authorities about cryptocurrencies. It also addresses the subject of tax compliance.
A director of the Indonesian Directorate General of Taxes (DGT), Mekar Satria Utama, claims that the MoU highlights the value of cooperation and innovation among tax authorities. He emphasized that the plan is essential for keeping up with the quick advancements in the global financial technologies scene. Utama said:
“While crypto assets are relatively new, the need to ensure equitable taxation remains essential to promote economic growth and provide revenue for crucial public investments in areas like infrastructure, education and healthcare”
The Indonesian tax officials and their Australian counterparts have previously collaborated. This collaboration has covered several DGT priorities. Among its characteristics is the introduction of a virtual tax assistant, which digitizes taxpayer services.
Additionally, the two groups worked together to implement value-added tax, or VAT, on digital goods and services. Indonesia has been working on creating regulations for the cryptocurrency industry. In an effort to create a crypto solid framework, it has also promoted collaboration with foreign nations and international organizations.
Indonesia’s Financial Services Authority (OJK) is spearheading these efforts and has been collaborating with financial authorities in Malaysia, Singapore, and Dubai to establish the framework for cryptocurrency regulation.
A recent rule stipulates that cryptocurrency companies that want to operate in Indonesia must first apply for a license, effective in January 2025, and then go through a regulatory sandbox.
The Financial Services Authority’s (OJK) move to regulate the cryptocurrency industry is in line with this regulation reform. Organizations in Indonesia are prohibited from offering cryptocurrency services without first finishing a sandbox examination.
Australia is among several nations collaborating with the Organisation for Economic Cooperation and Development (OECD) to establish the Crypto-Asset Reporting Framework (CARF).
This platform facilitates the automated sharing of data regarding crypto-assets. The goal is to establish a uniform system for the global taxation of cryptocurrencies.
Although this partnership does not have a formal bilateral tax treaty, its goal is to expedite tax processes and lower the amount of tax evasion related to cryptocurrency revenues.
