Israel's government confirmed Monday that it would treat bitcoin and other cryptocurrencies as a kind of property for tax purposes.
The notice 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 January 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 - is in line 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 outlined 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.
Israel on a map image via Shutterstock
Editor's Note: Some statements in this report have been translated from Hebrew.
The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at firstname.lastname@example.org.
IsraelIsraeli Tax AuthorityIsraeli government
Australia Warns of Fake 'Tax Collectors' Demanding Bitcoin
The Australian Taxation Office (ATO) issued a warning about would-be scammers trying to con people out of their cryptocurrency.
Since late last year, scammers have been calling Australians and impe
Bitcoin briefly falls below $8,000 after Google says it will ban cryptocurrency ads
Bitcoin prices briefly fell below $8,000 on Wednesday following news that Google, the world's largest online ad provider, plans to ban cryptocurrency advertising. Facebook, the second largest
Crypto Is a 'Crock'? Twitter Reacts to House ICO Hearing
Despite the overall measured tone among lawmakers at Wednesday's House subcommittee hearing on initial coin offerings, a few members of the panel made inflammatory statements.
Social media users re
UK Crypto Exchange to Launch Bitcoin Futures Contracts
A British cryptocurrency exchange is planning to enter the bitcoin futures market.
CoinfloorEX, a London-based exchange founded in 2013, announced Wednesday that it would launch bitcoin futures con
Congressional hearing on cryptocurrencies devolves into bitcoin bash fest
A House Financial Services subcommittee met Wednesday in what was supposed to be an overview of the cryptocurrency landscape. The two-hour hearing raised more questions than answers, and shined a
Square closes near all-time high after analyst compares stock to early days of Amazon
Shares of Square hit a new all-time intraday high Wednesday, jumping more than 5 percent after an analyst report compared the stock to 'Amazon in its early days.' Shares closed at $54.60
Bitcoin Price Sheds $800 In Drop to 1-Month Low
Bitcoin hit a one-month low on Wednesday as its price slipped below $8,300 during afternoon trading.
CoinDesk's Bitcoin Price Index (BPI) had fallen to as low as $8,287.98 as of press time, represe
Brazilian Officials Caught Using Bitcoin in $22 Million Scam
Police officials in Rio de Janerio have uncovered a money laundering scheme in which state officials siphoned off money intended for prison supplies, using bitcoin to exchange some of the proceeds.