Israel Tracks Down Cryptocurrency Tax Evaders Using Social Networks

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Israel has decided to tack cryptocurrency tax evaders by using social networks. Israel citizens need to pay 25 percent capital gains tax while crypto-related businesses must pay 25 percent tax and 17 percent of VAT. But not everyone is paying their taxes, that’s why the government will start to follow evaders in social media networks.

Israel Cryptocurrency Taxes

The first step that the authorities decided to take was to warn and communicate to all those they suspect are working with cryptocurrencies that they have to provide all the information regarding their virtual currency activities. That means that they will have to inform bout their transaction history, portfolio details, mining activities and more.

Cryptocurrencies are creating problems for tax authorities due to the fact that are difficult to trace. And Israel has decided to take stricter measures by hunting tax evaders using non-traditional methods.

In the past, Israel decided to start taxing initial coin offerings (ICOs). But it was not clear whether they were going to tax ICO founders, the company carrying out an ICO, team members and founders, or ICO investors.

The director of the Israeli Tax Authority, Moshe Ashe, explained:

“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.”

Should Government Tax Cryptocurrencies?

This is a good question. Too hard regulations could destroy a flourishing market. But if they are too soft, that could lead to scams and lack of trust in the crypto economy.

Shmuel Hauser, professor of Business Administration at Ben-Gurion University of the Negev, said that he believes that ICOs and virtual currencies should receive a favourable regulatory framework. This would allow investors to develop an international financial centre for ICOs.

At the moment, these financial centres are located in Malta, Singapore, Switzerland, and Bermuda is trying to do the same.

David Burt, Premier of Bermuda, said:

“We’ve demonstrated that Bermuda is open for business and we’ll continue to spread the message that Bermuda is the ideal place for future economic growth. The Island is place for stable regulation and legislative clarity around these new industries, and we intend on leveraging our legacy of blue-chip innovation to solve new problems in financial markets and digital assets.”