Israeli Crypto Exchange Agrees to Share Customer Info with Tax Officials
July 7, 2018 11:29 am
Bits of Gold, a major Israeli digital currency exchange, has entered an agreement to share customer’s transaction details with nation’s tax authority.
Under the terms of the agreement, Israeli Crypto Exchange Bits of Gold will give customer information who have made a transaction of more than $50000 over the last 12 months to Israel Tax Authorities, and local publication Calcalist reports referring sources familiar with the agreement.
While Israeli Law Dictates that financial brokerages are needed to pass on information of large and suspicious transactions to the Israel Money Laundering and Terror Financing Prohibition Authority (IMPA), they aren’t undoubtedly obligated to do the same with the tax authority because of privacy matters. For precedent, an Israeli court denied a request by the tax authority to receive a client list from a bankrupt bank since those details are protected under privacy laws.
It is particularly notable that this agreement has come to light wherein Bits of Gold – an exchange with over 50,000 registered users has allowed to pass on customers information to tax authority. The latter is stated to be seeking the data to check for tax evasion and money laundering.
The report further unveiled that the tax officials audited the company’s book last month ‘targeting not the company itself but its large-scale clients.’ Bits of Gold is simply the first digital currency exchange approached by the tax authority ‘in such a manner,’ the report added, recommending the agency will also be scrutinizing other domestic exchanges.
According to a report, the Israel Tax Authority issued first Tax guidelines for digital currency in 2017. Bitcoin and other digital currencies have been considered as assets wherein retail investors and even bitcoin miners are levied fixed business tax rates. While individual investors are asked to cough up the capital gains tax rate of 25% for profits from crypto trading, digital currency exchanges are also expected to levy a 17% VAT on their clients.
Prior this year, the authority doubled down on its position to confirm crypto investors are subject to capital gains taxes.
The tax authority has further narrowed down on fundraising through initial coin offerings (ICOs) in recent months.