- The bill would also lower the option income tax rate for cryptocurrency employees
- This is necessary to attract new investors and companies
- The government says Israel supports the market and favors sensible regulation
A bill to tax capital gains in cryptocurrency for foreigners passed its first reading in the Knesset, the Israeli parliament, yesterday, July 5. Also, the bill, if passed, would lower the CA option income tax rate for company employees from 50% to 25%.
The initiative is authored by Dan Illuz of the Likud Party.. According to him, the bill has the full support of the ruling coalition headed by Prime Minister Benjamin Netanyahu.
“Until now, those employed in the cryptocurrency industry had to pay double tax on income from options.. Moreover, foreign blockchain investors did not have the same benefits as investors in traditional high-tech,” Dan Illuz said.
The MP also added that Israel’s regulatory system is not ready for the integration of cryptocurrencies. That’s why a series of amendments designed to close the gap need to be passed.
Co-founders of the local ICBW3 Nir Hirschman and Shauli Reivan said in a comment for Cointelegraph that this is a huge step forward. Israel’s regulatory system has recently become much more open to the CA industry:
“We fully support cryptocurrency. Like Britain and the rest of Europe, Finance Minister Bezalel Smotrich has energized the local sector and issued a clear call to global investors and companies – Israel invites you to do business here, in the local market.”
It is also interesting that the bill introduces a distinction between the terms “digital currency” and “security”. Although the local ISA regulator had previously insisted on extending its rules to the entire crypto-asset market.. This is necessary, among other things, to stop the financing of terrorist groups. For example, we previously reported that the country confiscated “millions of dollars” in cryptocurrency.