Israeli Bitcoin investors are facing a hard time to pay their taxes in the country. The Israeli banks have refused to accept deposits from cryptocurrencies’ profits.
Citing the money laundering and terrorist financing concerns, the banks do not want to accept deposits from cryptocurrencies. Since Israel does not consider bitcoin as a currency the earnings are a subject to a certain amount of tax. For individuals, it is 25% of the capital gains and 7% for corporations. However, with the banks not accepting the deposits from crypto the investors are behind the eight balls.
Local news outlet details the experience of Ron Gross, a bitcoin investor. He has made some handsome profit from his Bitcoin investments since 2011. Also, he dutifully reported his incomer to the Israel Tax Authority. In 2017, his bank, Hapoalim, refused to accept his bitcoin deposit in his account. The banks’ refusal implied that his profits were stuck in the Swiss bank. Generally, there he deposited the dollars he converts from Bitcoin. With the Israeli banks not accepting the deposits, it had no way of reaching Israel then. Thus, he could not pay his taxes.
Though the tax authorities understood the problem, they were in no position to help him. Ron is not the only victim of this move of the banks, there are many. As per the source, there are ways of solving this problem but they are far from ideal. One can buy shekels in the gray markets for paying taxes; another is to move money through the investment houses. The problem with the latter is that they collect high fees for the service.
Recently in Israel, a hacker had allegedly stolen $1.7 million worth of cryptocurrencies.