Israel's tax authority targeting those avoiding crypto-related taxes

Israel’s tax collection authority is taking aim at cryptocurrency traders and investors who have unreported earnings from their crypto investments, Calcalist reports. reports.

The tax authority has reportedly sent notice letters to those whose activity raises suspicion of unreported earnings, like individuals who frequently travel without having the requisite funds on paper, or those who own more than three properties, said an official familiar with the matter.

Over the last two weeks, the tax authority has also unilaterally opened tax accounts for hundreds of Israelis who have been identified as having failed to report earnings on their cryptocurrency trading.

Cryptocurrencies are classified as a financial asset as opposed to a currency in Israel. As such, crypto trading is subject to a capital gains tax of 25% - 30%.

Chepicap reported in July that Israeli crypto exchange Bits of Gold agreed to cooperate with the country’s tax authority to provide information regarding large deposits.