Accounting journal entries and tax predictions for bitcoin transactions

2017/09/10

Taxation of fixed profits from virtual currency transactions

Japan's National Tax Agency has published a tax policy for profits generated by virtual currency trading.

The fact that miscellaneous income is included in the overall taxation, which means that it could be subject to a decent income tax rate of up to 50%, seems to have disappointed many virtual currency players, but in the case of Indonesia, virtual currency is just like the buying and selling of goods, and is subject to 10% VAT (PPN=Pajak (Pertambahan Nilai) It has been determined that it is subject to.

There are two main ways for an individual to purchase Bitcoin BTC in rupiah.

  • Buy from a sales office: the sales office sells BTC to individuals in rupiah.
  • Buying from an exchange: buying and selling BTC between individuals.

In other words, from the consumer's point of view, PPN-In will be charged 10% of PPN-Out on the exchange of rupiah into BTC, and on the contrary, the distributor will charge 10% of PPN-Out on the sale of BTC with a margin to the consumer, and the distributor will pay tax in this case.

Personally, I predict that 20% of PPH4(2), which is the final tax on capital gains from stock trading and interest on time deposits, will be imposed on fixed profits on virtual currency transactions in Indonesia in the future, not PPH Non-Final Tax.

Accounting journal entry for buying bitcoin with rupiah or rupiah with bitcoin from a sales office (I'm guessing)

Currently, the only tax that arises on BTC transactions in Indonesia is the PPN10% that arises on the exchange of BTC for Rupiah that occurs with the sales office, and not on the BTC-denominated capital gains that arise from trading between virtual currencies on the exchange.

There is no established accounting method for virtual currency transactions in Japan as of September 2017, much less in Indonesia, so the following is very likely to be wrong.

The withholding tax on capital gains, PPH4(2), which I just predicted above, is omitted.

  1. Journal entries on the consumer's side and the distributor's side when the consumer purchases BTC
    • Consumer buys Rp.1,000 worth of BTC from a sales office
      Dr. BTC 1,000　　　　Cr. Rupiah Deposit　1,155
      Dr. Commission（Expense）50
      Dr. PPN-In（VAT10%) 105
    • Exchange sells BTC to consumers for Rp.1,000
      Dr. Rupiah Deposit 1,155　　　　Cr. BTC Rp.1,000
      　　　　　　　　　　　　　　Cr. Commision（Profit） 50
      　　　　　　　　　　　　　　Cr. PPN-Out（VAT10%）105
  2. Journal entries on the consumer's side and the distributor's side when the consumer fixes the profit in rupiah.
    • Profits are fixed at the point of sale in rupiah for BTC (buy rupiah with BTC)
      Dr. Rupiah Deposit　1,450　　　　Cr. BTC 1,500
      Dr. Commision（Expense）50
    • Distributor sells Rp. 1,500 worth of Bitcoin Rp. 1,500 to consumers
      Dr. BTC 1,500　　　　Cr.Rupiah　Deposit 1,295
      　　　　　　　　　　　　　Cr. Commision（Profit） 50
      　　　　　　　　　　　　　Cr. PPN-Out（VAT10%）155

Accounting journal entry for buying altcoins with bitcoin (or vice versa) (I'm guessing)

As of September 2017, bitcoin payments are not allowed in Indonesia, but under tax law, with the exception of the legal tender rupiah and foreign currencies, all transactions are treated as assets (things), so accounting journal entries related to virtual currency transactions, such as buying altcoins with bitcoins, are barter, barter It is presumed to be similar to a journal entry for transactions.

Also, we believe that the barter profit generated by transactions between virtual currencies will not be taxed for the time being.

  • Accounting journal when you buy BTC with altcoins on an exchange
    Dr.BTC 1,500　　　　Cr. ETH 1,200
    　　　　　　　　　　　　　Cr. barter's margin of profit 300