Israel Confirms Virtual Currency Is 'Property'

by Lorys Charalambous, Tax-News.com, Cyprus

21 February 2018

The Israeli tax authority has decided that virtual currencies, such as Bitcoin, should be treated as a form of "property," rather than as foreign currency.

Echoing a previous circular on the matter, the latest notice, described as a final circular and published on February 19, means that investors in virtual currencies face paying capital gains tax at a rate of 25 percent on their gains.

The latest notice clarifies that value-added tax will apply at a rate of 17 percent when virtual currencies are used as a means of payment in connection with a business, including where that business is involved in the mining of virtual currencies.

However, the circular confirms that VAT will not apply to individuals trading virtual currencies as a form of investment.

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