Israel to exempt foreigners from cryptocurrency taxes

A bill proposing a full tax exemption for foreigners holding digital assets has прошел first reading in the Israeli parliament.

The initiative provides for reducing taxes on the sale of crypto options for employees of affiliated companies from 50% to 25%. The document also proposes using the term ‘digital currency’ separately from ‘security’.

According to the explanatory note, the proposed law is intended to make the country more attractive to foreign investors.

“Until now, employees in the crypto industry had to pay double tax on options compared with workers in the traditional high-tech sector. Moreover, foreign residents did not have the same advantages in the blockchain sector as conventional investors. This amendment is aimed at balancing the situation and eliminating discrimination in taxation,” said deputy Dan Illouz.

He said the proposal has won the support of the coalition government led by Prime Minister Benjamin Netanyahu.

Earlier, the Bank of Israel published a set of requirements for issuers «stablecoins». The recommendations envisage banning algorithmic stablecoins in the event of their widespread use in payments.

As of December 2021, Israeli authorities confiscated 189 accounts on the Binance cryptocurrency exchange, allegedly belonging to ISIS and Hamas.

In June 2023, it emerged that the government of the country seized millions of dollars in digital assets linked to terrorists.