Israeli government gives Bitcoin legal status, will tax it as an asset

The Israeli cryptocurrency community has now received some clarification on the legal status of Bitcoin in the country, with the country’s tax authorities recently announcing that Bitcoin and other cryptocurrencies will be considered assets and taxable.

The legal status of Bitcoin has been a gray area in many countries around the world. However, as Israeli authorities clarify their stance on cryptocurrencies, people will now have a clear path to prepare their tax documents. At the same time, some members of the cryptocurrency community are concerned that certain prohibitive provisions will make the use of cryptocurrencies expensive.

According to media reports, the Israeli Tax Authority has clarified the tax regulations for Bitcoin and other cryptocurrencies in the latest draft. The agency claimed that in view of multiple requests from the country's cryptocurrency community, the tax department decided to clarify the tax regulations for these cryptocurrencies. However, it is not clear when the country will officially implement the regulations.

The Israeli Tax Authority has clarified that cryptocurrencies are an asset that is different from financial securities or stocks. At the same time, cryptocurrencies such as Bitcoin will not be considered a form of currency. If someone wants to sell their cryptocurrencies, they will also be subject to a 25% capital gains tax. At the same time, exchanges that trade cryptocurrencies will also have to collect a 17% value-added tax (VAT) and pay it to the government, as well as corporate income tax.
The new tax draft will increase the transaction costs of all cryptocurrencies in the country, which will eliminate some of the benefits of cryptocurrencies. In addition, the implementation of the draft is expected to make it more difficult for businesses to accept cryptocurrency payments.

Bitcoin has proven itself as a form of money. This digital currency, like gold, meets all the qualities of an ideal currency. But governments have been hesitant to give Bitcoin the currency status it deserves, mainly because they fear losing control of their country's monetary system.

This situation is expected to continue for a long time until some country wakes up and decides to publicly recognize Bitcoin as a currency.