Israel intends to collect taxes from all ICO participants

The Israel Tax Authority plans to receive taxes from ICOs starting in the near future. Moreover, not only issuers of the initial placement of tokens, but also investors are subject to taxation

Although legislators are offering, in their opinion, more favorable conditions than the harsh measures of China or South Korea, the introduction of a tax on income from ICOs was a matter of time. After all, the rapidly growing ICO market, which grew by $4 billion over the past year, could not remain unnoticed by Israeli tax authorities. The published bill describes in detail all the nuances associated with the proposed tax from the placement of tokens.

One of the projects for the placement of tokens, which may already fall under the new bill, is the ICO from Sirin Labs. We wrote about this program to release smartphones and computers on the blockchain. By the end of 2017, this startup had raised $157 million. 

The draft states that it regards both tokens and bitcoin as assets, therefore, both issuers and investors will be taxed. Income from such operations will be considered “deferred”, therefore, its taxation occurs at the moment when the ICO initiator begins to fulfill its obligations to investors. The same applies to VAT. Accordingly, the ICO project credits all raised funds to “deferred income” in financial equivalent on the day the funds are received. 

“The IRS is monitoring technological developments and taking appropriate steps to streamline taxation processes for transactions involving digital currencies and tokens. Thus, increasing the transparency and certainty of taxation for those working in this area,” said the head of the Israeli tax department, Moshe Asher.     

According to www.ccn.com