According to Israel Tax Authority’s circular, Bitcoin and other cryptocurrencies are treated in the country as property, not currency.
Why is it important
Is Bitcoin a currency or a commodity? This conversation continues across all major markets and is, in fact, a cornerstone of cryptocurrency regulation. At least, one country is clear on that.
How about VAT?
There is some guidance in the circular, too. Whoever works with crypto for investment purposes and doesn’t reach a business, is not liable for VAT. If your crypto activities reach a business, you’ll be classified as a financial institution subject to VAT. And those who deal with mining are referred to as dealers also subject to VAT.
What can we learn from it
- That at least one country has a definite crypto taxation.
- That it’s not quite profitable to be a miner in Israel: they pay both VAT and capital gains.