Israel tax authority: Bitcoin to be considered as an asset for taxation purposes (Bitcoin News Today)

israel cryptocurrencies

Israel tax authority-Bitcoin to be considered as an asset for taxation purposes: All over the world, tax authorities are grappling with the question how to tax Bitcoin? In the latest development, Israel has confirmed that it will be considering Bitcoin as an asset while taxing it. This is the reason why it will be subject to capital gains tax.

Capital gains tax:

The tax authority in Israel issued a circular recently which clearly stated that Bitcoin will be considered as an asset rather than a currency. The 1st draft on the tax guidelines was issued in January 2017. The capital gains tax in Israel currently is around 25%. Thus, any profits from Bitcoin as well as other cryptocurrencies will be subject to 25% tax.

In addition to that, if any business or company is trading in cryptocurrency, it will pay an additional 17% value-added tax. The individual traders will be exempted from this value-added tax. However, on the other side, any individual or company who is mining the cryptocurrency will be subject to this 17% tax.

The taxation stance perfectly coincides with the view of the Central bank of the country. According to the deputy governor of bank of Israel, Naudine Baudot-Trajtenberg had stated recently that Bitcoin should be considered as a financial asset.

In January of this very year, the tax authority in Israel has also issued guidelines on taxation of ICOs. This move comes just after taxation was imposed on ICOs.

The tax authority seems to be consistently monitoring the ICO in cryptocurrency market. The technological advances are also being taken into account while deciding about the taxation. While many of the other countries are still grappling with the recognition and identity of cryptocurrency, Israel has gone ahead with the concrete proposal to tax the cryptocurrency.

Another problem seems to be waiting for the tax authorities as it is very difficult to exactly determine the number of profits generated from cryptocurrencies. That is why, even after this ruling, it will be difficult for the authorities to detect tax evasion and tax compliance when it comes to Bitcoin trading as well as cryptocurrency trading.

The other countries will also look at this precedence while recognizing the cryptocurrencies. Taxation on cryptocurrencies as to which is grappling most of the countries in the world. That is why; any precedents by Israel will be helpful.

With that being said, still, Israel tax authorities are much ahead than some of the other countries which are still trying to determine the amount of capital gains tax which should be charged on cryptocurrencies.

Adam Webb is editor in Smartereum, blockchain and currency news, where he produces updates on Blockchain, Ethereum and other alternative cryptocurrencies.

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