The Israeli Tax Authority has begun the hunt for crypto taxes

The Israel Tax Authority (ITA) is taking action against cryptocurrency tax evaders and has issued warnings to Israeli crypto traders.

The ITA “unilaterally opened tax accounts for hundreds of Israelis identified as having cryptocurrency-related income.”

The regulator says it has identified individuals suspected of hiding their income from cryptocurrency transactions. Citizens who “frequently travel abroad without having confirmed funds, or those who own several properties (more than three)” are suspected of such concealment. Warning letters have been sent to these individuals.

Under Israeli law digital coins are defined as “financial assets” and are taxed at up to 30% - although the government recently announced that this will give investors flexibility in how they choose to declare them. However, this year the ITA is trying to tighten the screws and convince crypto platforms based in the country to inform the agency when companies or individuals conduct large transactions.

Attitude regulatory authorities for the crypto industry in the country is not clear. Former Prime Minister Ehud Barak criticized cryptocurrencies, calling "bitcoins and other coins" "Ponzi schemes" but emphasized the merits of blockchain technology.

And last month, the Bank of Israel published a summary of the report of an inter-ministerial group created in November 2017 year, whose task was to study the possible benefits of issuing a digital version of the national currency - the shekel. The group concluded that there is no need to create a digital shekel “in the near future,” but said that “it is necessary to continue to study the issue and monitor developments.”