ISREAL TAX AUTHORITY
Local branches of the isreal Tax Authorty have issued out a letter to those that could have been trading with bitcoin without reporting it.
The tax agency stated clearly In the letter that all involvement in the cryptocurrency market
should be divulge by all recipient, they are also asked to list all exchange accounts and wallet
they ever had as well as the report of their trade earnings, they should also reveal if they are
The agency appears to be be very confident in its suspicions as some local tax offices have not
even bothered with sending out the letters with demands for information, instead they just
opened a business case for anyone they think is trading bitcoin. Those people are simply
informed they must pay income taxes as business owners now, fill reports retroactively back
from 2013 as well as keep balanced books and report taxes on salaries to employees as any
other business, as if they were restaurant or factory owners.
Earlier this year the tax agency issued a circular on the matter, declaring that bitcoin is an asset,
and thus anyone trading it must pay the capital gains tax of 25% and anyone considered to be
running a business must also pay the VAT of 17%. The Tax Authority commented to Israel’s
Globes newspaper: “Following the publication of the circular, which reflects the Authority’s
position on the taxation method of trading and investing in virtual currencies, the Authority is
working to locate those active in the field who do not manage a case in the tax authorities.
We recommend that those who conduct unregistered activity in these areas take advantage of
the existing channels to settle their issues before they will have to endure the unpleasantness
that accompanies enforcement. ”
LIST OF BITCOIN TRADERS
The Tax Authority is not exposing how it got its hands on a list of bitcoin traders in the country to
check if they report or not, but there a few obvious ways. The banking system in Israel is very
hostile to any bitcoin dealings, and the banks thus probably proactively report all inbound and
outbound transactions involving known accounts of exchanges abroad as possible money laundering and tax evasion.
And the few local trading avenues available to Israelis can easily be compelled to hand over a list of their clients with a warrant.
Investigators have used more creative means, however, people familiar with the tax scene told the Globes newspaper.
They claim that undercover agents are monitoring local groups for peer to peer buying and selling of bitcoin and other cryptocurrencies on Facebook, Telegram and Whatsapp.
The information gathered there is said to be sophisticatedly cross-referenced with other available data.