According to Barter News Weekly, the Israeli government will now charge capital gains tax on profits made from Bitcoin transactions. here is their report:
TEL AVIV – Transactions involving Bitcoins in Israel could be treated as barter transactions, and profits from coin sales could be charged a capital gains tax.
Late last week the Israeli Tax Authority issued a circular detailing the authority’s stance on the taxation of cryptocurrencies, saying that the Bitcoins and other cryptocurrencies shall be treated as assets when sold.
Cryptocurrencies are often considered to fall into a legal grey area for the purposes of taxation, with some countries classifying them as financial instruments, or currency, or an equivalent of a currency, or an asset.
The ITA has now decided that any cryptocurrency sold in Israel shall be regarded as the sale of an asset, and, subsequently, will carry a potential capital gains tax obligation.
The profits made from the sale of cryptocurrencies will need to be declared to the tax authority.
Some experts have noted that if the currency is treated as assets, any businesses accepting crypto-coins as payment will need to treat the transaction as a barter transaction, and will be required to complete their tax filling obligations accordingly.
The treatment of cryptocurrency as an assets does not preclude any transactions from falling under the scope of the country’s VAT system.
It has been said that, “the power to tax is the power to destroy.” Well, the decision of the Israeli tax authorities to tax Bitcoin transactions as asset transfers may not destroy Bitcoin as a speculative medium, but it will surely inhibit its use as a payment medium. The money and banking cartel hates competition.–t.h.g.