Israel Confirms It Will Tax Bitcoin as Property

[avikz]

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

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.

Slowly but surely countries are moving in to legalizing cryptos and taxing it. It's an welcoming move for sure. 2018 is showing us a lot of hope and light is becoming brighter day by day.

20 to 25% tax is not a very huge tax implication, at least far better than Japan where people are asked to pay 15-55% tax on their Cryptocurrency income. I am sure we will see a lot more countries this year who will take the same path as Israel.

[darkangel11]

It's nice that a tax was introduced (becuase it means cryptocurrencies are legal now) but 42% is really much. As such, I'm wondering whether this legislation will help because people may still try to avoid the law due to the high rate. Governments have to come up with reasonable rates, otherwise regulations will not work.

I'd prefer it to remain in the gray zone than be forced to give away half of my earnings (as a miner). Historically, Jews always knew how to make money and were seen as greedy people so it doesn't surprise me that their government is following the same path.
That's why I'm against regulations. They never bring anything good for the people. A government involvement always means that you'll get robbed while they're trying to make you feel happy, like you're doing a good thing, contributing and all.

It's not 42%. It's between 20% and 25%. In other words some people will pay 20%, some 21%, and so on with a max of 25%.

It's pretty reasonable.

Are you joking or are you unable to count? Miners are paying VAT, which makes it 20 + 17 = 37%, or  42% if you're in the higher bracket (earning more than the average). Does paying even the lower 37% seem reasonable to you? In my view it's a robbery. Please explain how can you see having to share 40% of your income with the government that isn't helping you earn those money in any way. You're paying all the property taxes, power bills and so on anyway, so what is justifying those rates in your opinion?

[mrcash02]

It's nice that a tax was introduced (becuase it means cryptocurrencies are legal now) but 42% is really much. As such, I'm wondering whether this legislation will help because people may still try to avoid the law due to the high rate. Governments have to come up with reasonable rates, otherwise regulations will not work.

I'd prefer it to remain in the gray zone than be forced to give away half of my earnings (as a miner). Historically, Jews always knew how to make money and were seen as greedy people so it doesn't surprise me that their government is following the same path.
That's why I'm against regulations. They never bring anything good for the people. A government involvement always means that you'll get robbed while they're trying to make you feel happy, like you're doing a good thing, contributing and all.

We will miss the gray zone's old times... Governments aren't having any kind of resistance, they feel safe and free to create any kind of regulations they want.

If people in this forum (considered Crypto enthusiasts) aren't worried and cheers each new regulation is created, now imagine what the ordinary citizens on these countries will do about it. Nothing!

Even if it's 25% maximum tribute, it's ridiculous. It's like to work 1/4 of your time to pay your boss without any guarantee if you fail in the middle of this process.

[hazznel]

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

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's good. People will no longer see Bitcoin as an outlaw, but rather as a new interesting approach to money and also to make profit.
Regulations are necessary so the general public won't fear it. After all, we can't fear money. All money are subject to inflation, deflation.

[eaLiTy]

I can understand the government taxing,i have no complaints about that,because they are just greedy as they always want money from everyone,but imposing twenty to twenty five percent for capital gains is a ridiculously huge amount they are asking,is there any tab up to what amount and how they are going to impose the tax,ten percent for capital gains is fine,but unless you are not a huge trader giving out twenty five percent is ridiculous.

[Indrawan77]

I think most of the country start to think bitcoin as a token that help people not as a threat anymore, it's a shame that with the adoption qw will nees to pay taxes but, it's still bettwr than the government closed down bitcoin, so I think this is a big progress for bitcoin, the future of bitcoin seem bright and bitcoin potential can be unleashed fully

[Pattart]

I think most of the country start to think bitcoin as a token that help people not as a threat anymore, it's a shame that with the adoption qw will nees to pay taxes but, it's still bettwr than the government closed down bitcoin, so I think this is a big progress for bitcoin, the future of bitcoin seem bright and bitcoin potential can be unleashed fully

As you know that Israel and US have a close relationship. Perhaps US also influence plays a role in determining the Israeli government's choice to make bitcoin a property and attract taxes to its users. just as American does. I think it's not a problem. Yeah even better than banning bitcoin but the "honesty" of users will be badly needed by the government. because you know an anonymous of bitcoin? so the government will don't know you're obliged to pay a bitcoin tax or not right?

[fer3219]

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.

this is a huge percentage , i doubt anyone would like to  report their activities as trader or miner if this is the amount they have to pay .

[YzzyGo]

It's okay for me to be taxed on crypto income but getting taxed this much is an outrage. It may be considered property but it is digital in nature and can only be realized when you sell it to fiat. We should only get taxed based on the sale.

[ganlianshifu1]

Until now, Israel has been vague about the concept of digital money, and now seems to have qualitatively.

The tax authorities see encrypted digital money as "property, not currency".

This acknowledges the legitimacy of BTC and other digital currencies!

[ylnar123]

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

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.

It is the basic job of the government to tax evrything in your property. The good thing is that israeli government acknowledge bitcoin in their country and did not deny it through banning. People in that nation can still do trading in cryptocurrency and continue their business in it.

[denzkilim]

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

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.

Slowly but surely countries are moving in to legalizing cryptos and taxing it. It's an welcoming move for sure. 2018 is showing us a lot of hope and light is becoming brighter day by day.

20 to 25% tax is not a very huge tax implication, at least far better than Japan where people are asked to pay 15-55% tax on their Cryptocurrency income. I am sure we will see a lot more countries this year who will take the same path as Israel.

Damn 15% to 55% tax on japan? That 55% of your crypto currency income is more than half and its pretty huge, I think they should lower it and it's kinda frustrating to pay 55% of your hard earned crypto currency income. For example if you profit 1 bitcoin you should pay 0.55 bitcoin to japan government if your on 55% tax list? lmao that tax will surely hurt and be a pain in the butt.

I thought japan was a crypto currency friendly country but it looks like they're milking out people based from what you just have said.  

[alyssa85]

Are you joking or are you unable to count? Miners are paying VAT, which makes it 20 + 17 = 37%, or  42% if you're in the higher bracket (earning more than the average). Does paying even the lower 37% seem reasonable to you? In my view it's a robbery. Please explain how can you see having to share 40% of your income with the government that isn't helping you earn those money in any way. You're paying all the property taxes, power bills and so on anyway, so what is justifying those rates in your opinion?

How many miners are there in Israel? Not many, the electricity is expensive.

The majority of people affected by the new taxes will be traders, and the tax is reasonable for capital gains.

[Geoll29]

If a government tax an investment it is considered legal. I think is good for bitcoin. But the tax shouldn't be high that nothing will be left to the poor investor. It should be a justifiable tax.

[Wedgrow]

A breakthrough and a new innovation that bitcoin be made property taxes for Israel, let this even follow other countries though gradually.

[iMark]

I can understand the government taxing,i have no complaints about that,because they are just greedy as they always want money from everyone,but imposing twenty to twenty five percent for capital gains is a ridiculously huge amount they are asking,is there any tab up to what amount and how they are going to impose the tax,ten percent for capital gains is fine,but unless you are not a huge trader giving out twenty five percent is ridiculous.

Is that true 25% for tax? if that's true of course it's crazy you know? it's obviously stealing by legal means, I know that the government has a superpower to make all the rules but for a 25% tax is an outrageous rule?
usually governments in some countries only apply 10% for tax (even that looks very big to me) let alone 25% lol, I will not pay bitcoin taxes, if the tax as much as that

[krishnaverma]

After several years of uncertainty, the Israel Tax Service published a document (the original in Hebrew) that defines the status of the crypto currency and the taxation regime applied to them.

I think all countries need to make their stance on bitcoins clear. For instance, Indian has not yet made bitcoins legal or illegal. Such a situation always leads to confusions among investors thus affecting investments.

[BartS]

I am not so sure it will be legal, at least for US were I think majority of users come from. Did you know that US sued (in US courts) the Switzerland bank for not disclosing that one of their customers was an American and not surprisingly US won and (maybe more surprisingly) eventually the bank paid the fine? Of course all the banking was done in Switzerland, but still US could intervene. So it seems that US can prosecute you no matter were you do your banking. I am not sure on what Israel may or may not do.

This article is on a different but closely related story: https://www.huffingtonpost.com/2011/09/04/us-switzerland-tax-dodging-sue-banks_n_948362.html

But that is because the US citizens need to pay taxes to the US government because the law in that country force you pay because of your citizenship and not for residence as it is the case for most countries around the world, which is one of the reasons why more Americans than ever are giving up their citizenship but I'm sure they will change that law in the future and they will charge you taxes based on where you were born since that is something that you cannot change.