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May 11, 2018

People under suspicion of trading bitcoin have been sent a letter by the Israel Tax Authority demanding to pay a retroactive tax covering all their holdings and transaction histories, Bitcoin.com reported today

The agency has opened business cases against all people under suspicion without requesting a formal declaration of assets. This year, Israel classified Bitcoin as an asset, making a 25% capital gains tax obligatory for traders and an additional VAT of 17% obligatory for miners, as they are both now considered to be business owners.

It is not clear how the tax authority identifies traders or miners. As the Israeli banking system is very hostile towards cryptocurrencies, it is highly possible that banks monitor all in- and outbound transactions and report them to the authorities.

Israel to Tax Bitcoin as Asset, Not Currency

By Nadya Astam

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