- Cryptocurrency users in Israel were recently asked to submit information regarding their crypto holdings to ITA.
- The country’s tax authority already began sending letters to everyone connected to the crypto industry.
- Even the locals who only possess empty crypto wallets were requested to fully disclose their assets.
As crypto adoption spreads around the world, the authorities of more and more countries are trying to come up with laws regarding digital currencies. At the very least, they are trying to introduce taxes on digital coins, with Israel being the latest example of this.
Israel’s Crypto Users to Report Their Coin Holdings
According to a recent report, the Israeli Tax Authority (ITA) has brought a new rule, requiring its residents to disclose their crypto holdings. As the number of crypto users in the country continues to grow, the tax authority thinks that it is time for Israel’s citizens to start including their digital assets into their tax reports.
The report published by Globes states that there are already dozens of Israelis who recently received requests from ITA. The tax agency wants them to fully disclose all of their digital assets for tax purposes.
The ITA seems to have received data regarding the locals’ crypto holdings from Israel-based exchanges. However, it also seemingly contacted platforms outside of the country, in order to obtain the real state of things regarding Israeli’s crypto usage.
Across-the-Board Auditing and Enforcement Are Not Far Off
The report notes that the tax agency applied the EU Common Reporting Standards regulations. It also got the US IRS to share data with Israel through the Foreign Account Tax Compliance Act.
The ITA further said that cryptocurrency investors in Israel needed to pay a 25% capital gains tax on their profits obtained from trading digital coins. Of course, this is only the case if the crypto users’ activities don’t turn into a commercial enterprise.
The Globes’ report also stated that all known crypto wallet holders received letters to disclose their assets, despite the fact that many do not have any assets apart from the wallets themselves.
Gidi Bar-Zakay, the founder of a crypto taxation calculation platform, Bittax, commented on the new development. He said that “The Tax Authority understands that a deeper examination of reports that have already been submitted to them, along with cross-referencing, can bring the state treasury significant, readily available, and fast revenue. I anticipate that we’ll see across-the-board auditing and enforcement very soon.”