Isreal Tax Authority’s various local branches have warned with letters to those who trade bitcoin without reporting it. The letter says that the agency will seize all the resources of the traders and will stop their involvement in the cryptocurrency market.
The agency is currently asking traders to list all the exchange accounts and wallets if they had and report their trade earnings. The bitcoin traders are simply informed that they must pay income tax as business owners now, fill reports back from 2013, report taxes on salaries to employees as any other business.
The authority earlier said that anyone trading bitcoin must pay the capital gains tax of 25% and anyone considered to be running a business must also pay the VAT of 17%.
The authority said that:
Following the publication of the circular, which reflects the Authority’s position on the taxation method of trading and investing in virtual currencies, the Authority is working to locate those active in the field who do not manage a case in the tax authorities. We recommend that those who conduct unregistered activity in these areas take advantage of the existing channels to settle their issues before they will have to endure the unpleasantness that accompanies enforcement.