According to a report by the Israeli media outlet, Globes. Four members of the Yisrael Beiteinu political party have presented a new bill. Specifically, they propose to recognize Bitcoin (BTC) as a digital currency rather than an asset.
Indeed, the new bill was presented on September 22 in the Israeli Knesset parliament. Which suggests several changes, mainly in Bitcoin and other cryptocurrencies.
In this way, activities related to Bitcoin (BTC) and other cryptocurrencies should be considered in the same way as activities related to Fiat currencies. All of this in regards to taxation.
Additionally, they insisted that virtual assets, with Bitcoin in particular, needed a revaluation. As current tax laws would slow down innovation in Israel’s financial system, while competing in the “emerging new digital reality.”
Until now, Bitcoin has been viewed as an asset under current Israeli regulations. And, it is subject to a 25% capital gains tax.
Bitcoin will be recognized as a digital currency and not as an asset
Definitively, those in charge of presenting the bill were MK Oded Forer, Yevgeny Soba, Yulia Malinovsky Kunin and Alex Kushnir deputies.
Precisely, it seeks to amend the section of the Income Tax Ordinance, which establishes that the digital currency is considered an asset. Therefore, its sale or conversion into Fiat currency is subject to capital gains tax.
In the explanatory memorandum for their proposal, the four MKs state that:
“The regulatory reality in Israel does not adapt to the reality in the field.”
The bill adds another section
At the same time, the bill also seeks to add a section to the Income Tax Ordinance. Which deals with the “determination of the distributed digital currency.”
According to the proposed section, the Minister of Finance, with the approval of the Knesset Finance Committee. It can prescribe provisions, under which it will be determined as a distributed digital currency.
And, you can in order determine the list of distributed digital currencies according to the provisions you have established.
By the way, MK Oded Forer said after the presentation of the bill that:
“The State of Israel has the ability to be among the leaders in the field of digital currencies.”
Furthermore, he added: “It is precisely in this period, when the economic future is not clear, that we need to give a boost to the engines of growth. Must promote digital payment options due to the social distance that has been imposed«.
It should be noted that the Knesset approved another nationwide quarantine from Friday 25. After in Israel, in a 24-hour period, more than 7,000 people were diagnosed with COVID-19.
Another private proposal
Later, another bill that was presented in the Knesset. Basically, it seeks to allow the reporting of digital currencies, once every six months or once a year.
The private proposal was in charge of MKs Forer, Soba, Kushnir and Malinovsky Kunin (Yisrael Beiteinu). Along with MK Eli Avidar (also from Yisrael Beiteinu) and MK Sharan Hashakel (Likud).
Very important, if the amendments go into effect, cryptocurrency sellers will be required to fill out a tax report within 30 days of the transaction. And pay an advance on the tax rate applicable to the capital gains of the transaction.
To conclude, the two bills are an infrastructure in which Israel can develop as a global financial center and leader in the field of digital currencies.
As a final point, what do you think about Israel’s proposed Bitcoin tax law? Leave us your opinion in the comment box.
I retire with this phrase from Ibiza Melián: “Impose legislative changes, without the citizens having previously understood them. It is simply decreeing the expiration date of any regenerative provision”.