Israel’s Crypto Industry Can Breakthrough With Revolutionary Tax Breaks

Key Points:

• Israel’s parliament approves tax breaks for the crypto industry, mirroring those enjoyed by high-tech enterprises.
• The measure aims to halve the tax on cryptocurrency options and attract international investment to Israel.
• The country is taking steps to regulate the digital asset market and promote clarity through proposed tax payment systems.

On Wednesday, a measure to extend some tax breaks available to Israel’s high-tech enterprises to the country’s crypto industry received preliminary approval in the Knesset, the country’s parliament.

The plan, which aims to change Israel’s Income Tax Code, also proposes halving the 50% tax on workers’ cryptocurrency options. In this sense, the objective is to extend the tax break enjoyed by employees in the conventional high-tech sector to the digital asset company.

Dan Illou, a lawmaker from Prime Minister Benjamin Netanyahu’s Likud party, said in a statement that the measure had the support of Netanyahu’s coalition administration. The law also fits with the current administration’s goals to entice international investment to Israel, according to CoinDesk.

“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,” said Illouz.

The most recent development comes as Israel attempts to control the expanding digital asset company. Shira Greenberg, Chief Economist at Israel’s Ministry of Finance, proposed ideas for regulating the country’s digital asset market in November, including the creation of systems for tax payment on digital asset operations to eliminate impediments and promote clarity.

Early this year, the Israel Securities Authority (ISA) began to develop a new regulatory framework for digital assets that primarily come under its control, which might bring more clarity to the industry. The amendments would add digital assets to the current category of “financial instruments” in Israeli securities law and define them as digital representations of value that are utilized for financial investment, and that can be exchanged using a distributed ledger.

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Harold

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