Israel Clarifies That Cryptocurrency is Not a Currency

February 20, 2018 Taxation in Israel

bitcoin taxTEL AVIV – Cryptocurrency will be taxed as an asset in Israel, meaning that miners will now be considered to be factories.

The Tax Authority of Israel has issued new guidelines on the taxation of cryptocurrency, confirming that profits made from coins will be subject to VAT and capital gains tax.

It was confirmed that cryptocurrency will be regarded as an asset and not a currency for the purposes of taxation.

Due to the consideration, any profits made from the use of cryptocurrency will fall under the scope of capital gains tax, levied at a rate of 20 percent to 25 percent.

Businesses involved in the sale of cryptocurrency or carrying out transactions with cryptocurrency will also face VAT on the transaction, however, that will not extend to private investors.

As cryptocurrency is to be considered an asset any business involved in the mining of new coins or the issuance of tokens will be considered to be producing a new asset, and, as such, will be taxed in the same way as a factory.