Saha Swatilakha
In a significant move to enhance the detection of assets that may have tax liabilities in either country, Indonesia and Australia’s tax authorities signed a Memorandum of Understanding (MoU) for a cryptocurrency information-sharing arrangement.
The agreement, which was unveiled April 23, emphasizes the importance of innovation and collaboration among tax authorities to keep up with the rapid advances in the worldwide landscape of financial technologies.
The MoU signed at the Australian Embassy in Jakarta, aims to promote a more effective interchange of cryptocurrency-related data and information across tax authorities. It also highlights the need for equitable taxation to promote economic growth and provide revenue for crucial public investments in areas like infrastructure, education, and healthcare.
Mekar Satria Utama, a director of the Indonesian Directorate General of Taxes (DGT), stressed the significance of the agreement, stating that while crypto assets are relatively new, the need to ensure equitable taxation remains essential. The DGT and the Australian Taxation Office (ATO) have a long-standing partnership, which has focused on modernizing and digitizing taxpayer services, implementing value-added tax on digital goods and services, and collaborating on international tax and broader reforms.
The latest arrangement builds on this partnership, underscoring the shared commitment of Indonesia and Australia to adapt and innovate in the face of an evolving financial landscape, ensuring a fair and sustainable tax framework for the digital era. The Indonesian government has been actively developing laws for the crypto sector, encouraging partnerships with foreign countries and international groups to develop a solid crypto framework. The Financial Services Authority (OJK) has been working with financial regulators in Malaysia, Singapore, and Dubai to create the basis for crypto regulation.
Meanwhile, Australia is one of many countries working with the Organization for Economic Cooperation and Development (OECD) to create the Crypto-Asset Reporting Framework (CARF), which allows for the automatic exchange of information about crypto-assets. The aim is to institute a standardized approach for the worldwide taxation of cryptocurrencies.
The Indonesian DGT and the Australian ATO have been working together on several DGT priorities, including the digitization of taxpayer services through the implementation of a virtual tax assistant and the introduction of value-added tax (VAT) for digital goods and services. Entities that provide cryptocurrency services in Indonesia without first completing a sandbox evaluation would be deemed illegal. The new regulation, which takes effect in January next year, coincides with the Financial Services OJK’s move to oversee the cryptocurrency sector.
The latest arrangement underscores the shared commitment of Indonesia and Australia to adapt and innovate in the face of an evolving financial landscape, ensuring a fair and sustainable tax framework for the digital era. The agreement will promote a more effective interchange of cryptocurrency-related data and information across tax authorities, ensuring compliance with tax obligations and promoting economic growth.
