The Tax Authority of Israel declares that Bitcoin is an asset and generates taxes

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The Tax Authority of Israel declares that Bitcoin is an asset and generates taxes

coincrispy 22 May, 2019 news.eBitcoinics.com Views: 311

The Israel Tax Authority has ruled that Bitcoin is an asset and not a currency, so the transaction is subject to taxes, according to a recent report by the Globes news agency.

Noam Copel, the founder of the blockchain startup DAV, argued that Bitcoin should be considered as a foreign currency. In addition, your earnings should be considered as " the exchange rate differences received by an individual that is not in the course of a business, " so they should not be taxed.

Given this, the Tax Authority clarified that Bitcoin is not a currency, therefore, much less could it be a foreign currency. It is considered an asset and generates taxes on capital gains.

The court states that to be considered as currency, the Bitcoin had to have some physical-concrete manifestation or represent a real alternative to the coins and banknotes in any country, which Copel had not been able to demonstrate.

Judge Shmuel Bornstein pointed out that in the current context it is difficult to consider Bitcoin as a currency for fiscal purposes in particular. This is because there is still the possibility that it may cease to exist and be replaced by another digital currency.

Bornstein agreed with the tax regulator in the resolution that the appellant is subject to taxes of about 3 million NIS. Copel, which bought bitcoins in 2011 and sold them in 2013 for a profit of 8.27 million NIS, was also ordered to pay 30,000 NIS.

Gidi Bar Zakay CPA, former deputy head of the Israel Tax Authority and specialist in cryptocurrency taxes, commented:

"In my opinion, what will ultimately determine whether Bitcoin is a currency is the proof of reality. As soon as its use becomes widespread, the legislature will have to redraft the law in a way that suits this, and we will all benefit from these technological and monetary developments and the ability of Bitcoin and other cryptocurrencies to serve as means of payment. reliable, efficient and widely accepted. "

Bornstein clarified that this decision was " for now ", but that at this time the Bitcoin could not be considered a currency.

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The Tax Authority of Israel declares that Bitcoin is an asset and generates taxes

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