Israel Tax Authority Rules Bitcoin Will Be Taxed As An AssetFebruary 20, 2018 12:57 pm
Cryptocoinsnews reported cryptocurrencies like bitcoin will be taxed as an asset with investors subjected to capital gains tax, Israel’s official tax authority confirmed.
Israel’s Tax Authority has deemed cryptocurrencies will be regarded as ‘assets’ rather than currencies, the report said.
In January 2017, the authority first issued an early official draft to clarify tax guidelines for cryptocurrency adopters after repeated requests from the community seeking government clarity on its stance on the taxation of cryptocurrencies, the report said.
The next move by the Israeli tax authority will be to set taxation guidelines for assets wherein individual investors will be subject to the 25 percent capital gains tax for profits from their cryptocurrency holdings, Cryptocoinsnews reported.
In addition, businesses and exchanges trading cryptocurrencies will be liable to pay a 17 percent value-added tax (VAT), the report said.
Interestingly, individual investors will be exempt from paying VAT as cryptocurrencies used for investment purposes are markedly seen as intangible assets, the report said. Individuals who are involved in mining or trading cryptocurrencies will also be subjected to the VAT of 17 percent.
The clarification by the authority classifying cryptocurrencies as “assets” coincides with a similar approach taken by the country’s central bank, the report said.
In a January speech, Bank of Israel (BOI) deputy governor Nadine Baudot-Trajtenberg said the BOI’s position on cryptocurrencies “is that they should be viewed as a financial asset, with all that entails,” the report said.
The Tax Authority’s final draft on cryptocurrency taxation follows recent moves in January in which tax officials published draft legislation to collect taxes from initial coin offerings (ICOs), part of its wider focused move to collect from the cryptocurrency sector, Cryptocoinsnews reported.
– WN.com, Jack Durschlag