Israeli foreign residents may soon benefit from a tax exemption on the sale of digital currencies.
A new bill that would afford certain tax benefits to Israel’s crypto sector has passed a preliminary reading in the Knesset, the country’s parliament.
A proposed bill that would exempt foreign residents from capital gains tax on the sale of digital assets and reduce tax on crypto options from 50% to about 25% passed its preliminary reading on Wednesday.
Israel Vies to Attract Investment
The bill, sponsored by Knesset member Dan Illouz, has the full support of Israel’s coalition government led by Prime Minister Benjamin Netanyahu. Illouz explained the bill is part of a larger economic strategy to attract investors and companies to the country.
The bill’s explanatory note details:
Despite the growth potential of Israeli companies in the field, the regulatory reality in Israel is not adapted to the digital currency industry. Therefore, it is proposed to make a number of legislative amendments that will reduce the regulatory gap.
If passed, the bill would grant tax benefits similar to those afforded to high-tech firms to Israel’s crypto sector.
Mr Illouz said in a press statement:
Up until now, workers in the crypto industry had to pay double the tax on their options compared to workers in the traditional high-tech industry. Moreover, foreign investors in the blockchain industry were not entitled to the same benefits as those entitled to investors in the traditional high-tech industry.
This law amendment aims to balance the situation and eliminate the discrimination in taxation.
The bill further proposes that “digital currency” be used separately from “security.”
Move Signals That Israel is Embracing Crypto
The country’s decision to equal taxation for crypto investors is a clear sign of actively embracing the industry.
Israel has been working toward integrating crypto into its economy. The country’s central bank, the Bank of Israel, issued principles for regulating stablecoin activity in February.
The Tel Aviv Stock Exchange also revealed the Israeli government would conduct testing of a blockchain-based platform for issuing digital bonds. The project, dubbed “Eden”, aims to reduce costs and optimise the procedure of national bond issuance.
Israel’s largest bank, Bank Leumi, also stated it would become the first Israeli bank to enable crypto trading, following a partnership with Paxos. The bank’s digital platform, Pepper Invest, said that collaborating with Paxos would allow its customers to buy, hold, and sell cryptocurrencies.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Source : Crypto Daily