The Israeli Tax Authority (ITA) has demanded that cryptocurrency holders fully disclose their assets and the profits they have earned, Globes reports.
According to the publication, dozens of Israelis received notices from the ITA. The agency has also sent requests to local and foreign cryptocurrency exchanges demanding that information about citizens’ accounts be transmitted.
As the basis for obtaining data from trading platforms, the ITA cited the EU’s Common Reporting Standards and the Foreign Account Tax Compliance Act. Under the latter, data from the U.S. Internal Revenue Service are also transmitted to Israel.
Experts attribute the ITA’s interest in industry players to a budget shortfall and new Bitcoin record highs. In the authorities’ view, many traders should cash out as prices rise.
In 2018, the tax authority equated cryptocurrencies with financial assets, obliging individual investors to pay a 25% capital gains tax.
In 2019, Israeli crypto investors faced a tax-paying problem due to banks’ unwillingness to accept funds derived from digital asset transactions. The country’s Bitcoin Association, through the courts, demanded that banks explain the reasons for refusals.
In September 2020, Israeli Knesset members urged to exempt holders of bitcoin and other cryptocurrencies from taxation.
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