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Home Latest News Policy and regulation Israeli tax authorities Inform cryptocurrency owners regarding their holdings for tax purposes

Israeli tax authorities Inform cryptocurrency owners regarding their holdings for tax purposes

The Israel Tax Authority (ITA), the revenue collector, allegedly sent notifications to dozens of Israelis who own digital currencies telling them to declare their assets in full and be taxed accordingly. The tax authority has also sent inquiries to cryptocurrency exchanges working in Israel and others located outside the country, in addition to sending letters to local residents.

Israeli media speculation that tax assessors around the country were exerting “pressure on the digital currency market” followed news of the notifications and inquiries submitted by the revenue collector. But, as Globes is now saying, the ITA needs to “obtain information about Israelis trading in these currencies.” Before sending notices and inquiries to crypto exchanges, the Israeli revenue collector had been receiving “data about the Europe-based funds and accounts held by Israelis.”

According to news.bitcoin.com, in line with the “EU Common Reporting Standards (CRS) regulations for the automatic exchange of financial account information,” Israel receives this data. Similarly, with its counterpart in the United States, the Israeli tax collector is stated to have a different arrangement. Explains the report: “Additional information comes through the FATCA agreement, which conveys the US Internal Revenue Service (IRS) data to Israel.”

Meanwhile, the Globes report attempts to link the “renewed interest” in cryptocurrency taxation “to the digital currency revival, especially the bitcoin leap, along with an intense need to fill state coffers.”

However, prior to its recent interest in taxing holders of cryptocurrencies, back in 2018, the ITA had released its position on cryptocurrencies. According to the published document, “investors in digital currencies are subject to a 25% capital gains tax, as long as their activity does not turn into a commercial enterprise.”Nevertheless, “proprietors will be charged a two-stage corporate tax, or a marginal tax according to the individual tax brackets.” In the meantime, according to the Globes report, the letters from the Israel Tax Authority to Israeli crypto holders are intended to encourage them to voluntarily “report their income before the tax authority gets to them.”

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