Israeli Authorities Plan to Tax Bitcoin and Other Cryptocurrencies as Property
Back in January, the Israeli tax authorities released a notice to all crypto investors and stakeholders in the country’s blockchain-based digital currency space of its intentions to tax ICO schemes. In the letter, it was made clear that the masses had a period of two weeks to send in their comments.
However, the government confirmed on February 19, that it would tax bitcoin and altcoins as property.
No More Suspense
The Israeli government confirmed in a notice on February 19 that bitcoin and other cryptocurrencies would be taxed just like properties.
The statement puts an end to the extended period of suspense and uncertainty that crypto enthusiasts in Israel have been living with over the years. The tax authority has hinted that cryptocurrencies are not the same as fiat money but can be categorized as properties.
In a notice published in January, the authorities stated that ICO projects that raised over 15 million new shekels (approximately $4.3 million) must follow the bookkeeping guidelines and money made from token sales by token holders must be taxed.
Also, cryptocurrency investors are liable to pay a 25 percent capital gains tax, while exchanges will charge a value-added tax of 17 percent.
“A person whose income from the sale of tokens reaches the level of a business, his income will be classified as a business income, and it will be subject to tax rates under sections 121 or 126 of the ordinance,” some parts of the notice read.
It is important to note that the Israeli government has been looking for ways to tax cryptocurrencies since 2013. While authorities have officially made the announcement, this is not the end of the story as officials are still trying to formulate laws that would continue to have either a positive or negative impact on the Israeli crypto space.
Aimed at Chasing Away Crypto Investors?
While nations like Spain and some others are creating tax breaks and legislation that would make it easier for cryptocurrency and blockchain startups to hit the ground running, Israel is doing the direct opposite.
In December 2017, the Israeli authorities hinted that it was considering creating its national cryptocurrency, a computerized shekel, which would have the same value as the fiat shekel.
The heavy-handed taxation on ICOs, bitcoin, and altcoins might be a strategy to chase away bitcoin investors from the Middle Eastern country so that the proposed crypto shekel would have the nation all to itself.