It was on February 19, 2018 that the Israeli Tax Authority proceeded to unveil the final circular which described the state of affairs moving forward. It indicated that cryptocurrencies will continue to be considered as a form of property.

It is worth noting that the previous year according to the market analysts was accompanied with significant success in the sector of cryptocurrency. The value of bitcoin scaled up pretty fast, a matter that ended up drawing the attention of quite a large number of investors.

The circular clearly outlines the stands of both the Israel Securities Authority and the Tax Authority. But on the same note it is critical to point out that still to this moment quite a significant number of people understand pretty in terms of what Bitcoin is.

A person familiar with the matter opined, “When calculating income tax, if the cryptocurrency is considered an ‘asset’ and ‘does not reach a business,’ then only capital gains tax applies. The capital gains tax is between 20 and 25 percent.”

Fundamentally, whenever there will be the need to use Cryptocurrencies in making payment for goods and services, the taxation will be similar to that that happens for the rest of the business activities.

The circular provides that whenever it gets down to doing calculations of VAT liability or the value-added tax it is crucial to understand that cryptocurrency is most at times considered to be an “intangible asset” who central purposes revolve around the making of investments.

It is thus worth noting that there will be nothing in the form of VAT liability though at the same time it is crucial to point out that those persons undertaking trading activities using cryptocurrencies will be required to pay a VAT of 17 percent. It goes without saying that this particular figure will be paid on top of the capital and a similar rule will also be applying or the miners as well.

Business dynamics keep shifting from time to time and thus it is difficult to tell how the future unfolds for this sector.