The government of Israel confirmed Monday that it will treat bitcoin and other cryptocurrencies as a kind of property.
This confirms previous allegations that the IRS will treat bitcoin as “property, not currency,” making it taxable as such. The first position of the IRS described in the draft circular issued in January this year.
The circular explains that the profits from cryptocurrency will be taxed on capital gains and will range from 20% to 25%, while individuals who are engaged in mining or trading, should pay 17% value added tax (VAT) in addition to the tax on capital gains.
The government of Israel started to work on the taxation of cryptocurrencies back in 2013.
Although the last statement was expected (given project), the IRS will still continue to work on initiatives that can have an impact on the entire industry.
In late January, the IRS also published a draft outlining possible ways to tax the ICO. One of the most possible options is the establishment of a minimum threshold of sales (token), which will be initiated by the tax.