NFTs subject to tax, should be declared in annual tax return

The Indonesian government through the Director of Extension, Services and Public Relations at the Directorate General of Taxes (DGT) Neilmaldrin Noor announced that non-fungible tokens (NFTs) are now subject to tax, hence must  be declared in the annual tax return. 

“NFTs and other digital assets should be declared in the Annual Tax Return in accordance with the market value on 31 December of [each] year," said Neilmaldrin. 

The decision was made as digital asset trading continues to rise in Indonesia, especially due to the fact that it has become a new form of investment. 

Indonesian Crypto Asset Traders Association (Aspakrindo) Chairman as well COO of Tokocrypto Teguh Kurniawan Harmanda sees the news in a favourable light. He said that tax imposition has a positive impact because it encourages the industry to develop further. The government’s decision also validates that the crypto asset industry and its ecosystem do and will continue to contribute to the country's economic growth. 

“Don’t make crypto investors or NFT owners trade abroad, as it will result in opportunity loss for Indonesia," said Harmanda in an official statement on Saturday (8 January).

As reported by CNN Indonesia, Neilmadrin, however, added  that as of now, there are no specific rules regarding digital assets such as NFTs. Hence, the general tax provision and procedure will be applied. 

In particular, the directorate general will mainly refer to Law Number 36 of 2008 on Income Tax which states that any additional economic capacity should be subject to tax, whether it is acquired locally or internationally.Taxpayers who have NFTs or any other digital assets should declare it in the annual tax return via a self-assessment system.