Israel to require residents to report crypto holdings above $61,000

Israelis will be required to report holdings of digital assets worth more than 200,000 shekels (~$61,270). Such a proposal is contained in the Finance Ministry’s bill.

The document is open for public consultation until 31 July.

The new requirement is included in the draft amendments to the economic policy. The document is being considered by the Knesset alongside the annual budget.

The initiative is aimed at “disclosure of unreported assets and income” and boosting tax take.

The Israeli Bitcoin Association urged lawmakers to engage in dialogue, according to Coindesk. The association’s spokesperson said that the Israel Tax Authority (ITA) listened to them and is ready to study proposed amendments.

According to the publication, the association drew attention to privacy infringements for crypto investors and the risk to their security in the event of a leak of the compiled database. It also noted the absence of such reporting requirements for holders of other assets.

“This is a bad idea. It will harm investors and will not add a single shekel to tax revenue in Israel. We still have time. I hope our efforts will pay off,” said Nir Hirschman, head of the association’s regulatory affairs department.

In December 2020, the ITA demanded that cryptocurrency holders fully disclose their assets and profits.

In September 2020, members of the Knesset urged to exempt holders of Bitcoin and other cryptocurrencies from taxation.

In 2018, the tax authority equated cryptocurrencies with financial assets, obliging individual investors to pay a capital gains tax of 25%.

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