The Israel Tax Authority (ITA) is targeting cryptocurrency traders and investors in an aggressive push that is aimed at curbing tax evasion. Already, the organization has already issued warnings to a number of Israeli-bases crypto enthusiasts and traders, in addition to striking deals with certain Israeli crypto exchanges obliging them to report any big transactions.
According to financial reporters from the country, the Israel Tax Authority (ITA) has stated that it intends to pursue even firmer measures in a bid to ensure that cryptocurrency traders report any gains they make from the world of cryptocurrencies.
The basis of the letters that were sent out to some parties who are suspected to be evading tax is the authority’s stringent measures that are in place to identify and document cases of fraudulent activities that resemble evasion. Such activities include frequent overseas travel without documents to support said travel or without the provision of any relevant materials that may detail trip expenses. Moreover, cryptocurrency traders who own a number of estates are also likely to be subject to investigations if the newly proposed regulatory measures are passed.
Cryptocurrencies to Be Treated as Assets
ITA is also considering unilaterally opening tax accounts for parties that have been identified to have failed to report gains made from cryptocurrency trading. All of these efforts come just two years after the tax authority classified all cryptocurrencies as assets and indicated that they would be taxed as such – income from bitcoin or any other digital currency would be taxed as “sale of property” while income and capital gains from them would be taxed according to the fixed tax rates.
The authority further clarified that the digital currency holders would be required to pay 25 percent in capital gains each time they dispose of their holdings. Crypto exchanges as other related services were also required to pay a 17 percent value-added tax. ITA double down on this position in February this year when it said that it would still be taxing digital currencies as assets – the rates on capital gains and VAT would remain the same.
Bitmain Shuts Down Its Israeli Operation
Amidst all the buzz about the stringent tax laws, Chinese crypto mining firm Bitmain is set to shut down its Israeli office this week after about three years of operation in the country. This move will leave all of its 23 employees jobless. The report that brought this to life further stated that Gadi Glikberg, the company’s vice president for international sales and marketing has also been fired.
A statement issued by Glikberg on behalf of the company said that the company had been forced to “examine the various activities in the global company and to refocus activities according to the current situation” due to the “turmoil” in the cryptocurrency industry.