[2018-02-20] Israel Confirms It Will Tax Bitcoin as Property

[moriskarlov]

Israel's government confirmed Monday that it would treat bitcoin and other cryptocurrencies as a kind of property for tax purposes.

The notice confirms past indications that the Tax Authority will regard cryptocurrencies as "a property, not a currency", making it therefore taxable as such. The Authority's position was first detailed in a draft circular issued in January of this year.

The circular explains that profits from cryptocurrencies will be subject to capital gains tax at rates between twenty percent and twenty-five percent, while individuals mining or trading cryptocurrencies in connection with businesses must pay a seventeen percent value-added tax (VAT) in addition to capital gains tax.

That latter aspect - excluding broad swaths of investors from potential VAT charges - is in line with a trend seen in recent years since the issue gained prominence. The Israeli government started exploring the taxation of cryptocurrencies as early as 2013.

And while today's announcement was largely expected (given the previous draft release from the Tax Authority), officials there are still working on initiatives that could continue to impact the industry at-large.

The Authority's Monday announcement follows another draft circular published in late January, which outlined potential ways in which the government could tax ICOs. Possible steps include setting a minimum token sale revenue threshold at which a tax would be triggered.

https://www.coindesk.com/israel-confirms-will-tax-bitcoin-property/

[[As]]

Israel's government confirmed Monday that it would treat bitcoin and other cryptocurrencies as a kind of property for tax purposes.

The notice confirms past indications that the Tax Authority will regard cryptocurrencies as "a property, not a currency", making it therefore taxable as such. The Authority's position was first detailed in a draft circular issued in January of this year.

The circular explains that profits from cryptocurrencies will be subject to capital gains tax at rates between twenty percent and twenty-five percent, while individuals mining or trading cryptocurrencies in connection with businesses must pay a seventeen percent value-added tax (VAT) in addition to capital gains tax.

That latter aspect - excluding broad swaths of investors from potential VAT charges - is in line with a trend seen in recent years since the issue gained prominence. The Israeli government started exploring the taxation of cryptocurrencies as early as 2013.

And while today's announcement was largely expected (given the previous draft release from the Tax Authority), officials there are still working on initiatives that could continue to impact the industry at-large.

The Authority's Monday announcement follows another draft circular published in late January, which outlined potential ways in which the government could tax ICOs. Possible steps include setting a minimum token sale revenue threshold at which a tax would be triggered.

https://www.coindesk.com/israel-confirms-will-tax-bitcoin-property/

I knew that bitcoin will be approved of Israil.

[laurenB7742]

I don't get it exactly how are they going to "tax bitcoins". Probably they mean only in case you exchange to fiat and withdraw to bank account.

[romero121]

I don't get it exactly how are they going to "tax bitcoins". Probably they mean only in case you exchange to fiat and withdraw to bank account.

Yes, that is the way by which Israel government has planned to tax the users involved in making an earning through cryptocurrency. Long back itself this regulatory act has been created and this has come to the implementation level now. With this citizens need to pay tax as that pay for the gold or other properties.

[richardsNY]

I don't get it exactly how are they going to "tax bitcoins". Probably they mean only in case you exchange to fiat and withdraw to bank account.

You don't actually need to have the fiat be sent to your bank account in order to pay tax over your profits. The moment you cash out profits on-exchange, you legally realized a profit, and that needs to be declared, even if all your funds remain on-exchange for ever. It also applies to holding coins on-exchange, which of course makes sense. In the same way, that's also how it works when you book profits through a broker platform concerning non crypto financial products and tools. The key however is still in your hands when it comes to declaring profits. If you want to take the risk, you can choose to not declare anything at all. However, you can be assured that when exchanges are forced to submit user data to the tax department of your country, you'll be busted for sure.

[senin]

Of course, each state will now consider or is already considering the possibility of establishing taxes on income in the crypto-currency activity. This is one of the stages in the formation and development of the crypto currency. Of course, everyone is wondering how the tax authorities will determine the subjects for such taxation and how it will be deducted. Most likely, everything is still calculated for the consciousness of its citizens and the obligation of exchanges, exchangers, banks to deduct such taxes automatically when carrying out the corresponding operations or to provide information about such transactions to the tax authorities.