Cryptocurrency owners in Israel must disclose their holdings to the country’s tax agency, a new report has revealed. The Israeli Tax Authority has been sending these owners letters, reminding them to pay their digital currency taxes. According to the Hebrew-language newspaper Globes report, the Israeli Tax Authority has been closely assessing the digital currency industry in recent months. This has resulted from a deepening need for extra revenue by the Israeli government and the surge in prices for most digital currencies.
The Tax Authority has been sending inquiries to local and global exchanges.
The Israeli Tax Authority has been sending inquiries to local and global cryptocurrency exchanges, pressing them to divulge information about Israeli digital currency owners. Having applied the E.U.’s Common Reporting Standards, the tax Authority has also been receiving data from other European nations regarding Israeli accounts and funds. A bilateral agreement with the IRS further allows the agency to receive financial information on Israelis from the United States. According to the report, the agency has been sending letters to cryptocurrency owners, akin to those sent by the IRS in 2019.
The letters warn crypto holders of not meeting their tax obligations.
The letters tell their recipients, “We have information about your activities that does not match your tax return.” The tax agency then informs the recipient that it has been collecting data from crypto exchanges that indicates he is not meeting his tax obligations. “Most players’ get the message’ and run to their representatives—lawyers and accountants—to look into how they should report,” the local newspaper reports. According to local tax expert Leor Nouman, the tax agency is just ‘fishing’ with its latest efforts. Speaking to Globes, he claimed that these letters are framed in the “just tell us what you have before we come for you” format.