Israel’s revenue collector, the Israel Tax Authority (ITA), has reportedly sent notifications to dozens of Israelis who own digital currencies, asking them to disclose their assets and be taxed accordingly. In addition to sending letters to local citizens, the ITA has also sent inquiries to cryptocurrency exchanges operating in Israel and those based outside the country. According to local news outlet Globes report, the ITA wants to “obtain information about Israelis trading in these currencies.”
ITA has been receiving data about the Europe-based funds and accounts held by Israelis.
Before sending notices and inquiries to crypto exchanges, the Israel Tax Authority had been receiving “data about the Europe-based funds and accounts held by Israelis.” Israel receives this data in line with the “E.U. Common Reporting Standards (CRS) regulations for the automatic exchange of financial account information.” Similarly, the Israeli tax collector is reported to have a different arrangement with its counterpart in the United States. The report further noted, “additional information comes through the FATCA agreement, which conveys the U.S. Internal Revenue Service (IRS) data to Israel.”
Crypto regulations remain in a grey area worldwide.
Though governments worldwide are actively trying to regulate the growing crypto industry, but crypto-related regulations remain in a grey area. The U.S. government has taken several measures to regulate the crypto industry in the country, including proposing taxes on cryptocurrency incomes. The U.S. Internal Revenue Service has moved up the crypto-related question on the tax form to give it more importance. Some countries, like South Korea and Switzerland, have taken progressive steps to regulate the industry. South Korean government also passed to law to tax crypto earnings in the country.