Israel government is thinking to implement new rules which may not entertain cryptocurrency traders. Isreal Tax Authority may collect tax from both side issuers as well investors on all the upcoming ICOs. Recently crypto market plummeted down with China and South Korea FUD but it looks like Israel is approaching towards the same attitude in near future.
Government authorities have issued a draft in which they proposing to impose tax on all the upcoming ICOs and blockchain companies. Tax authority is well aware from the funds of about $4 million which was raised by ICOs in 2017. Sirin Labs is the upcoming project which needs to face tax issues as company collected about $118 million by distributing SRN Tokens.
Tax authority director Mr. Moshe Asher issued that draft which influences it to clear that it’s tending to utility tokens, which is the means by which the lion’s offer of guarantors portray their digital coins instead of securities.
“The Tax Authority is monitoring the technological developments and is working to provide an answer regarding the tax implications of virtual currency transactions and the issuance of digital tokens, thereby increasing the certainty and tax transparency of those operating in the field.”
Like a current affirmation by the Tax Authority to consider bitcoin (BTC) as an asset , ICO tokens are being esteemed a benefit, and issuing organizations behind them and also the investors who purchase the tokens would be liable to obey the tax law. Thus companies need to provide P&L report with cryptocurrencies same they do with other assets.
At the level of the issuing company, the draft circular regulates the source of income in the framework of the issue, the method of recognition of income, and determines the times for this in accordance with the various circumstances and familiar business models in this area of activity.
It should be emphasized that the draft circular deals only with the tax issues that can arise from the issue of UTILITY TOKENS only, and does not deal with the issue of tokens. The draft circular also refers to the tax implications of trading virtual distributed chips such as Bitcoin or the Atrium (for this purpose, the Authority published a draft circular on the subject of “taxation of activity in virtual currencies”.
