Israel Confirms It Will Tax Bitcoin as Property
Israel has confirmed that it will treat cryptocurrencies as taxable assets in a new circular published on Monday.
Israel's government confirmed Monday that it would treat bitcoin and other cryptocurrencies as a kind of property for tax purposes.
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.
Israel on a map image via Shutterstock
Editor's Note: Some statements in this report have been translated from Hebrew.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.