Indonesia and Australia Forge Crypto Tax Alliance

The Indonesia and Australia tax authorities signed an agreement in Jakarta today to set up a crypto-information-sharing arrangement.

Under the deal both countries reached Tuesday, it will boost the identification of assets that could be subject to tax in each country. It is meant to facilitate an easy exchange of crypto-related data and information between tax authorities, also including adherence to tax responsibilities.

"This MoU, in the view of Mekar Satria Utama, who is a director at the Indonesian Directorate General of Taxes (DGT), attests to the innovation and collaboration that the MoU supports between the tax authorities. They would otherwise be left behind in the rapid advancement being witnessed in the world financial technologies arena.".

"While crypto assets are relatively new, the need for tax fairness is an essential part of fostering the economy and generating revenue to support public investment in infrastructure, education, and health," said Utama.

ATO and DGT Unite to Mark New

One such cooperation has been the history of the Australian Taxation Office (ATO) and Indonesian DGT. It includes priorities for several DGT projects. It includes aspects such as digitization of taxpayers' services through a virtual tax assistant. Both have also agreed to work together regarding matters of value-added tax (VAT) on digital goods and services.

Regulations and Information Sharing Take Center Stage

It has proactively framed regulations in the crypto sector. The country actually welcomed foreign nations and international organizations to partner and establish a strong framework for cryptos.

Spearheading these has been the country's Financial Services Authority (OJK), which has partnered with financial regulators in Malaysia, Singapore, and Dubai to lay a good foundation for crypto policy.

Under the new rules, Indonesian cryptocurrency businesses that are really willing to begin operations must first be tested in a regulatory sandbox before receiving a license in January 2025. The regulatory change comes simultaneously when the handover supervision of the industry to the Financial Services Authority (OJK).

This would mean that all those entities that provide cryptocurrency services in Indonesia without an assessment under the sandbox would be deemed to be engaged in illegal operations.

In this line, Australia is one among the many of such countries that are collaborating with the Organisation for Economic Co-operation and Development (OECD) to develop a common international framework for the automatic exchange of information in respect of crypto-assets, known as the Crypto-Asset Reporting Framework (CARF).

What they do seek, however, is a standardized approach to taxing cryptocurrencies across the globe. In a way, though they are not this, they would be a tax treaty existing between such two countries, hoping that the collaboration will encourage improved tax transparency, which would mean a lessening of tax evasion trends for crypto profits.