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In order to make bitcoin as a subject of capital gain Tax in Israel, a local court has classified it as a legitimate asset, rather than a hobbyist commodity.
The decisions were made during a court hearing in the Central District Court, where the Tax Authority of Israel and a blockchain startup founder were disputing the company’s tax payment processing.
The dispute was about the founder not paying enough in taxes in terms of capital gain. Since has already been named an asset, it’s obvious that the ITA won that hearing.
The hearing was not about the man’s company not paying taxes on capital gains, but rather the owner themselves.
Noam Copel, the founder and CEO of DAV.Network had bought BTC as early as 2011 and sold it in 2013 for a hefty $2.2 million profit.
His argument was that BTC should be considered as a foreign currency, and not be subject to capital gain tax.
Why was the decision made?
The ITA challenged Noam, by stating that was an asset and not a currency, even though it was not the case legally at the time. However, the court supported the Taxing Agency and named BTC as an asset right on the spot.
Shmuel Bornstein, the judge responsible for the decision, said that BTC cannot be a real currency as it can simply be replaced by another altcoin. Therefore it loses all legitimacy for branding itself as alternate currency and is subject to capital gain tax.
Noam is now supposed to pay around $800,000 in taxes to the agency and another $8,000 as legal fees. However, an appeal is still possible.
Published at Thu, 23 May 2019 04:22:14 +0000
