Israel Plans To Treat Bitcoin As Currency

282
The plenum hall of the Israeli parliament on the opening of the 22nd Knesset, Israeli parliament, in Jerusalem, on October 03, 2019. Photo by Hadas Parush/Flash90 *** Local Caption *** פתיחת הכנסת מליאה
The plenum hall of the Israeli parliament on the opening of the 22nd Knesset, Israeli parliament, in Jerusalem, on October 03, 2019. Photo by Hadas Parush/Flash90 *** Local Caption *** פתיחת הכנסת מליאה

Israeli lawmakers have proposed in a draft new law to treat bitcoin as a currency instead of an asset for tax purposes, local media reported.

According to a report from Globes, four legislators from the Yisrael Beiteinu political party presented the Income Tax Ordinance (Taxation of the Sale of Digital Currencies) bill in the Israeli parliament Knesset on September 22.

The bill by the four – MK Oded Forer, Yevgeny Soba, Yulia Malinovsky, and Alex Kushnir – proposes several changes to crypto taxation, including the amendment of the existing tax law to exempt digital assets like bitcoin (BTC) from capital gains tax. The bill says:

“The regulatory reality in Israel is not adapted to the existing reality in the field. [Digital currencies] will continue to be a growth engine that allow the Israeli high-tech industry to flourish and develop”.

Bitcoin is currently recognized as an asset in Israel, meaning that sales of the crypto or conversions to cash attract a capital gains tax of 25%. However, some users like short-term BTC lenders and those who undertake bonds-related activities pay capital gains of 15%.

In 2019, Israelis with income of less than $22,000 were reportedly taxed at a rate of 10%, on the average – a level that might assume some significance should the proposed law be approved.