Israel Tax Authorities To Get Customer Information As Exchange Agree
After an unprecedented run for the crypto market last year in 2017 with a massive inrush of investors participating in crypto space, the tax authorities of various countries are now reaching out to exchanges to get their customer information.
Till the last year, apart from providing handsome return to investors, crypto was viewed as an important tool to evade taxes. The Israel Tax Authority (ITA) has now successfully entered a deal with the local cryptocurrency exchange ‘Bits of Gold’ who will be sharing their customer transaction details with their tax agency.
As per the terms of the agreement, the cryptocurrency exchange will provide information of all those clients who have done more than $50,000 worth of transactions in the last 12 months. This step from the Israel Tax Authority (ITA) and its government is taken to prevent the acts of money laundering and other illicit transactions done using cryptocurrencies. Bits of Gold is reportedly said to be the largest operating exchange of the country.
According to the existing Israeli laws, financial brokerage across the country are required to provide information of all the suspicious and large transactions to the Israel Money Laundering and Terror Financing Prohibition Authority (IMPA). Due to privacy reasons, it is not compulsory for them to report the same information to the tax authority.
In this particular case, it is a bit surprising as Bits of Gold has agreed to share its client information with the tax authority. The tax agency has clarified that it is seeking this data only to keep a watch on activities of tax evasion and money laundering.
As per the local new publication Calcalist, the tax authority has already audited the exchange’s books last month while targeting its large clients. Bits of Gold is the first exchange which has been under the radar of the tax authorities and the report says that even more local exchanges are soon likely to come under the scrutiny.
The crackdown on crypto-service providers and businesses operating in Israel has started earlier this year itself. In May, the Finance Ministry of Israel ordered supervision in all such crypto activities in order to finalize on the legal framework for the operation of digital currencies.
However, the Israel Security Authority (ISA) special committee has previously recommended that digital currencies should not be treated as securities while should be used exclusively for consumption. This means that Israel could possibly allow the use of cryptocurrencies as a means of payment.