Israel’s government confirmed Monday that it would treat bitcoin and other cryptocurrencies as a kind of property for tax purposes.
The 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 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 latter aspect – excluding broad swaths of investors from potential VAT charges – 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 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.
image via Shutterstock
Editor’s Note: Some statements in this report have been translated from Hebrew.
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Published at Mon, 19 Feb 2018 19:40:19 +0000
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