Crypto Coin is a Property, Not a Currency- Said the Israel Tax Authority
Israel is the next country after Russia and Ukraine to consider cryptocurrency as a property. Yesterday, 19 February 2018, the Israel’s government has announced that it will tax the owners of digital assets.
An official press release is focusing on naming Bitcoin and altcoins “a property, not a currency”. The Israel Tax Authority (ITA) has been already made publicly a draft statement on 11th January 2018. They wrote then on ITA’s website that “According to the Bank of Israel Law, the virtual currencies are not considered “currency” or “foreign currency” and therefore these currencies will be considered as “assets” and will be sold as a “sale” and the proceeds from their sale will be classified as capital income”.
The yesterday announcement was not something unexpected, because of Israel’s government implication in virtual regulating measures. Besides making currency as a property, the Tax Authority mentioned a potential tax on ICOs.
The final regulation’s version made by ITA states that “For purposes of income tax – in accordance with the circular, a distributed means of payment is an asset, and therefore a person whose activity as aforesaid does not reach a business is only entitled to capital gains tax and the person whose activity in the field reaches a business (trade in a distributed method of payment and / Such a measure), tax will be paid as any business activity.”
We want to remember that the draft document published in January 2018 has referred to tax also the crypto mining activities. However, this detail wasn’t mentioned in yesterday’s statement. But it still a potential regulating measure.