Crypto Exchange Bits Of Gold Agrees To Report Big Traders To Israel’s Tax Regulatorbr>
Founded in 2013 in Tel Aviv, Bits of Gold offers buying and selling services of bitcoin and ethereum in exchange for ILS, USD and EUR via bank transfer, cash and credit cards. The company also serves as a liquidity provider of bitcoin and ethereum for exchanges, and operates a high-volume brokerage and over the counter (OTC) trading floor.
According to local media reports, Bits of Gold reached an agreement with the Israel Tax Authority to report information on users who trade more than $50,000 over a twelve-month period. The agreement was reached after the authority conducted an audit in the company’s Tel Aviv offices, targeting users who made large transactions.
While Israel-based crypto exchanges are required to report big trades to the country’s Money Laundering and Terror Financing Prohibition Authority, the tax authority does not have the legal right to compel companies to report on their clients without their agreement. The tax authority is now reportedly planning to approach other crypto exchanges to try to reach similar agreements.
In February of this year, the Israeli Tax Authority issued guidelines on the taxation of cryptocurrency transactions and cryptocurrency mining in the country. According to the guidelines, crypto investors will have to pay a capital gains tax on its value, at rates ranging from 20% to 25%. But individuals who trade in cryptocurrencies for business purposes will pay a value added tax (VAT) of 17%, on top of the capital gains tax. Local cryptocurrency mining firms will be taxed in the same way as a factory.
In May, the Ministry of Finance published a draft legislation that incorporates cryptocurrencies into the regulatory apparatus designed to prohibit money laundering in the financial services sector. Fnancial institutions, including brokers, banks, money changers, and crypto exchanges will be obligated to report any suspicious crypto activity by their clients.