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Israeli Tax Authorities Investigate Social Media for Bitcoin Supporters

Israeli Tax Authorities Investigate Social Media for Bitcoin Supporters

Israeli Tax Authorities Investigate Social Media for Bitcoin Supporters

The Israel Tax Authority has released letters to suspects of unauthorized bitcoin trade through its local branches. In the letter, the authority has asked investors to reveal their involvement in digital currencies with the past and present records of their holdings. The suspects will also have to provide data on their earnings even if they are no longer using the service. Also, miners will have to disclose their hideouts and provide relevant information to the authority.

The agency has been very confident in its approach as few local tax officers have opened cases on suspects instead of sending a letter demanding information. The authority has ordered tom that from now on suspects will have to pay income taxes as the owners of business. They will have to prepare reports back from 2013 and maintain books while reporting taxes on salaries of their employees.

The tax authority issued a notice on the matter earlier this year. It informed bitcoin as an asset, and every trader is entitled to pay gains tax of 25{d433fa1c024495e3d30fb9a8ae174a80907308b9b8a5f0e72f30e7e693d34bc9} and 17{d433fa1c024495e3d30fb9a8ae174a80907308b9b8a5f0e72f30e7e693d34bc9} VAT is levied on anyone running a business.  Globes newspaper, a local publication, came up with the official statement of the authority. It read, “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. ”

However, the Tax Authority did not reveal the ways it discovered the list of suspects of bitcoin trading in the country. The Israeli government has been hostile towards bitcoin traders since the very beginning and has been tracking activities of all financial institutions. It is being speculated that banks have been actively reporting the transactions of abroad exchanges as money laundering and tax evasion. On the other hand, the few local trading platforms available to the Israeli citizens can easily be traced and forced to disclose its clients through a warrant.

According to people familiar with tax authorities, the investigative team has not left a single source of information unused. Globe newspaper revealed that agents are keeping a close look at Telegram, Facebook, and Whatsapp for discovering local groups that are involved in peer to peer sales of bitcoin.  It is reported that agents used the available data to cross-reference the information obtained from social media.

It seems that the Tax Authority does not want bitcoin or any other digital currency to build a foundation in the country. Acknowledging bitcoin mining as a business will probably damage the already minimized operation of a local miner.  The amount of taxes and regulation forced on traders is enough to kill their enthusiasm, and only the bigger players might survive. As of now, there has been no retaliation recorded by the crypto supporters.

About the author


Sean Halverson

Sean Halverson knows an emerging opportunity when he sees one. He's gone big into cryptocurrency. He has been contributing towards ICO Advisory and Start-Up since a couple of years. With his experience, he decided to study the cause and effects of fluctuations in the cryptocurrency market and to share his knowledge with the crypto enthusiasts.

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