Internet Firm Spot.IM Seeks Israel Authorities’ Approval To Pay Salaries In Bitcoin

News | June 15, 2018 By:

Social network company Spot.IM is seeking approval from the Israel Tax Authority (ITA) to allow the company to give employees the option of getting paid in bitcoin.

Spot.IM is a social engagement platform that builds online communities around digital content. The company works with publishers to bring conversations back from social networks to publisher sites. Headquartered in New York City, the company also has an office in Mahane Yehuda, Jerusalem, the internal capital Of Israel.

The company said they are currently negotiating with the ITA to receive permission for the proposed payment method. Letters requesting approval for the move were also sent to the Ministries of Labor, Economics and Welfare. The company said it expects progress in the coming weeks.

To address bitcoin volatility issues, the company plans on using an exchange rate which consists of the average of the highest and lowest bitcoin value on the specified day. The company will allow employees to choose which percentage of their salary they would like to receive in bitcoin, and will use Israel-based crypto exchange Bit2C in order to convert shekels to bitcoin.

“As ones who deal with some of the most advanced technologies every day, we are great believers in the future of cryptographic currencies,” said Ido Goldberg, Head of Spot.IM’s operations in Israel. “Still, currencies are built on trust, and to create such trust companies, organizations and institutions will have to recognize cryptographic currencies as legitimate.”

“Bitcoin, like other cryptocurrencies, is turning into a legitimate form of payment both in Israel and abroad, and employees as well as employers are learning about the advantages in using it for long term savings or as a worldwide payment method,” said Ron Zarfati, Vice President of Regulation at Bit2C. “Spot.IM will receive a proprietary company account at Bit2C, and every employee that chooses so will receive a digital wallet address where the coins will be stored.”

In February of this year, the ITA issued guidelines on the taxation of cryptocurrency transactions and cryptocurrency mining in the country. According to the guidelines, cryptocurrencies are assets rather than currencies, and will be taxed accordingly. 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 these 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.