BVI company trading profits

[JohnDoe1122]

I wanted to ask some questions. Say hypothetically a BVI software development company provides software development in exchange for crypto. The software development company issues an invoice for amount X. The crypto price goes up and now is X*2. Eventually dividends are paid to the shareholders (Dividends in a stablecoin for example). They have to provide SOF to the bank. How do they do that? They have documents only for amount X (contracts, invoices). Is an invoice for every crypto trade issued even if done on DEFI?

 

[SoNewToAllShit]

In this case, the Source of Funds (SoF) is straightforward: you received X BTC at a value of 100, and five days later, they're worth 150, assuming you haven't sold them in the meantime. So, you should record them as income at 100 on the day they're received, and the 50 should be recorded as a capital gain.

Now you have both the invoice and accounting records to show the bank as proof of SoF - very simple.

 

[JohnDoe1122]

SoNewToAllShit said:
In this case, the Source of Funds (SoF) is straightforward: you received X BTC at a value of 100, and five days later, they're worth 150, assuming you haven't sold them in the meantime. So, you should record them as income at 100 on the day they're received, and the 50 should be recorded as a capital gain.

Now you have both the invoice and accounting records to show the bank as proof of SoF - very simple.
Click to expand...

Do you issue an invoice for the capital gains? How are the accounted for? From what I got financial year end accounts for a BVI company are pretty simple and I would say that for a bank probably not enough. Aren't they like: cash equivalents, investments, debts, expenses

Last edited: Aug 29, 2024

 

[SoNewToAllShit]

You need a professional accountant to do the work, otherwise forget it. If you come with some home made mickey mouse accounting to the bank they will refuse it, so your shareholders would look stupid if they can't deliver something professional to the bank. Unless the dividends are only 500$