Israel Regulatory Bodies for Taxes Announce Mission to Find Profitable Crypto Sellers for Tax Evasion
The tax-collection organisation that operates within Israel has announced that it will be taking on a newly firm stance against cryptocurrency-based traders and Investors operating within the country. Its goal is to help lead the push against tax evasion, and hopefully stem the problem long-term.
This is according to financial reporters within the country that have announced that the Israel Tax Authority (ITA) has stated that it intends to take on these firmer precautions as a means of preventing traders from not reporting on monetary gains that they may make from investing in the world of Cryptocurrencies.
Among the measures that have been proposed, these may also include the submission of letters that notify those parties that may be suspected of evasion of tax from the cryptocurrency trade. Currently, the ITA has stringent measures already in place, as well as means of identifying fraudulent activities which resemble evasion.
These often include frequent travel overseas without relevant documents to support this travel, nor the provision of any materials which may go into detail about trip expenses. Along with these measures, those involved in trading that own a number of estates may also be subject to investigation under the newly proposed measures.
“The authority has also sent notice letters to Israelis whose activity raises suspicion of unreported earnings, such as those who travel abroad frequently without having the requisite funds on paper, or those who own over three apartments…”
This is part of an extract from the Israel based financial news outlet, the Calcalist, which reported on the story when it happened.
Crypto Tax Campaign – The Battle Against Tax Evasion Will Continue
One of the further moves taken by the regulatory body is the push to unilaterally open the tax accounts of those that are suspected of having some involvement in evasion. This would also include those who have been otherwise highlighted as failing to report any gains that have successfully been made from this trade.
According to the head of the ITA, Eran Yaakov, the organisation has re-affirmed its desire and efforts in order to pinch at those guilty of committing tax evasion of some degree. Demonstrating that the cryptocurrency market in Israel is not exempt from domestic tax law.
It was two years ago that the Israel Tax Authority took the stance towards Bitcoin and other associated cryptocurrencies as valid assets, and as a result, it would tax them under this classification.
“[Bitcoin] will be considered in accordance with the Income Tax Ordinance as “assets” and their sale will be taxed as a sale of “property.” Income from their sale will be classified as capital income and capital gains will be taxed according to fixed tax rates.”
CCN reported the ITA as having said in a statement early last year.
During this point in time, the ITA confirmed that those known as holders of any number of crypto-assets would be obligated under law to pay approximately 25 percent in capital gains tax each time they have sold on their relevant holdings. By extension, the Israel Tax Authority has also been hit with a further 17 percent VAT in conjunction with this move.
As of February 2018, the Israel Tax Authority made it clear that it will be doubling down on its initial stance, further adding that it would be taxing crypto-assets with both Value Added Tax as well as capital gains tax remaining at the same levels as before.
According to reports from last month, the Israel Tax Authority has also went on to put forward a piece of draft legislation with regards to Initial Coin Offerings, in which the tax organisation stated that these associated tokens would go on to be classified as assets with the responsibility of paying the corresponding tax decrease on relevant ICO investors, along with issuers.