Israel’s crypto-tax rules seek to treat bitcoin as an asset

The government of Israel has decided to treat digital currencies like bitcoin as assets instead of foreign currencies for the purpose of taxation.

The Israel Tax Authority released a draft circular last week, which detailed “the tax professional activities of virtual currencies.”

Under the new rules, transactions involving bitcoins in the country will be treated as barter transactions, and any profit from coin sales can be charged with capital gains tax, which starts at 25 percent. Aside from the capital gains tax on those profits, the ITA said commercial sales and trading transactions may also be subjected to value added tax.

The ITA said profits made from the sale of cryptocurrencies in the country will be need to be declared to the tax authority.