The director of Israel’s Tax Authority Eran Yaakov told Ynet on Thursday “I can say that we collected from only one person NIS 300 million (roughly $92 million) on profits from crypto.” Yaakov participated in the Regulation and Blockchain Conference of the Israeli Bitcoin Association and the Crypto Israel community in Tel Aviv.
That taxpayer apparently recorded profits of about NIS 1.2 billion ($366 million) from the sale of digital coins, since these sales are taxed at 25% of the profit.
“The crypto industry is a blessed industry and offered many opportunities,” Yaakov said, adding, “But in this industry, as in any business, certainty is needed. Let people know what the law says, so they can act legally.”
Yaakov did not specify the total amount of taxes collected from crypto profits in Israel but revealed: “So far, we have collected far fewer taxes from this field than the public deserves to receive. There are a lot of difficulties both in the tax world and in the banking world on collecting these taxes, even though it’s clear this is a property that’s subject to taxation.”
Jacob also clarified that NFT assets are also taxable. An NFT, or non-fungible token, is a non-interchangeable unit of data stored on a blockchain, a form of digital ledger, that can be sold and traded. Types of NFT data units may be associated with digital files such as photos, videos, and audio. Because each token is uniquely identifiable, NFTs differ from blockchain cryptocurrencies, such as Bitcoin.
“We will issue a clarification today that any transfer or exchange of property or service will be taxable,” Yaakov told Ynet. “Their market value was $40 billion in 2021 and the tax share in the State of Israel is not negligible. The tax that will apply to the profits is a real 25% capital gains tax, which applies as soon as the NFT is sold or converted.”