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Indonesia imposes 11% on digital wallets and crypto assets May 2022

Money transfer services via payment wallets do not enjoy Financial Services exemption. Also imposing VAT on crypto asset trading transactions

Indonesia’s Finance Ministry has confirmed the financial tech companies offering digital wallet services will be subject to charging standard rated VAT.  This will apply from 1 May 2022. This includes crypto asset physical traders and crypto asset electronic wallet service providers, will be designated as VAT collectors. Crypto assets are digital assets based on distributed ledger technologies.

Indonesia raised VAT from 10% to 11% on 1st April 2022.

Digital wallets are online payment tools, usually in the form of an app. The wallet securely stores virtual versions of debit and credit cards, so you don’t need to enter your card details or carry a physical card at all to make payments.

Other fin tech services subject to VAT include:

  • Online insurance
  • Peer-to-peer lending
  • Crowdfunding

EU VAT on digital wallets

EU European Court Justice rulings have similarly favoured not giving digital wallets VAT exemption.

Bookit Ltd (Case C-607/14) held that a ‘payment processor’ responsible for transmitting authorisation codes, preparing and sending settlement files, and receiving related payments and transferring them to merchants does not constitute a specific and essential role in changing the legal and financial situation.

Asia Pacific VAT on digital services

Comments (click for details) Rate Date Threshold Comments
Australia 10% Jul 2017 AUD $75,000
Azerbaijan 12% Jan 2017
Armenia 20% Jan 2022 AMD 115million
Bangladesh 5% - 15% Jul 2019 B2B and B2C
Bhutan 7% Jul 2021 Nu 5million
Cambodia 10% Mar 2022 KHR 250m
China 6%-13% N/a Nil Withholding VAT; B2B and B2C
Fiji 9% TBC FJD 300,000
India 18% Jul 2017 -
Indonesia 11% Aug 2020 IDR600m or 12k customers
Japan 10% Oct 2015 JPY 10 million
Kazakhstan 12% Jan 2022 Nil
Kyrgyzstan 12% Jan 2022 Nil
Laos 7% Feb 2022 LAK 400m
Malaysia 6% Jan 2020 RM500,000
New Zealand 15% Oct 2016 NZD 60,000
Pakistan 2% Sep 2021 Nil Marketplace Withholding VAT
Philippines 12% TBC P 3million
Singapore 7% Jan 2020 S$ 100,000
South Korea 10% Jul 2015 Nil
Taiwan 5% May 2017 NTD 480,000
Tajikistan 18% Jan 2021
Thailand 7% Sep 2021 1.8m Baht
Uzbekistan 15% Jan 2020 Nil
Vietnam 10% Dec 2020

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