Israeli Lawmakers Seek to Exclude Foreigners from Crypto Capital Gains Tax

<p>Legislators
in Israel conducted preliminary reading for <a href="https://main.knesset.gov.il/activity/legislation/laws/pages/lawbill.aspx?t=lawsuggestionssearch&amp;lawitemid=2202412" target="_blank" rel="follow">a
new bill</a> that proposes the exemption of foreigners from capital gains taxes
or profit made from their cryptocurrency activities. </p><p>The bill,
which seeks the amendment of Israel’s Income Tax Ordinance, also prescribes
cutting the 50% tax on employees’ crypto options by half. The goal in this
regard is to extend the tax benefit enjoyed by workers in the traditional high-tech
industry to the digital asset industry.</p><p>Israeli
Eyes Change to Crypto Tax Rules</p><p>Dan Illou,
a lawmaker in Prime Minister Benjamin Netanyahu’s Likud party, noted in a
statement that the bill has the backing of the coalition government led by
Netanyahu. The bill also fits into the current administration’s plans to
attract foreign investment to Israel, CoinDesk quoted Illou as saying in a
statement. </p><p>The latest
development comes as Israel seeks to regulate the emerging digital assets
industry. In November, Shira Greenberg, the Chief Economist at the Israeli
Ministry of Finance <a href="https://www.gov.il/he/departments/news/press_28112022" target="_blank" rel="follow">put forward
recommendations</a> for regulating the country’s digital asset market, including by creating
mechanisms for tax payment on digital asset activities “in order to remove
barriers and increase certainty.”</p><p>“Regulatory
processes are being formulated and determined during this period in various
countries in the Western world, and it is recommended that the State of Israel
act in accordance with the standards emerging in the developed world,”
Greenberg stated in a statement.</p><p>Earlier
this year, the Israel Securities Authority (ISA) also <a href="https://www.financemagnates.com/cryptocurrency/israel-seeks-to-amend-securites-laws-to-fit-in-crypto-calls-for-input/" target="_blank" rel="follow">published a proposal</a> seeking to amend the
applicability of the Western Asia nation’s securities laws to crypto and
digital assets. In addition, the Bank of Israel recently <a href="https://boi.org.il/en/communication-and-publications/press-releases/principles-for-stablecoin-activity-in-israel-document-for-the-public-s-comments/">proposed rules for permitting stablecoin use</a> in the country while managing
risks and protecting investors. </p><p>Crypto
Regulation in Israel</p><p>In the last
five years, Israel has created three committees to look into various areas of
crypto <a href="https://www.financemagnates.com/terms/r/regulation/">regulation</a> and adoption in the country, <a href="https://www.financemagnates.com/" target="_blank" rel="follow">Finance Magnates</a> reported. The third committee,
which was established in May 2021, sought to assess the ISA’s policy with
regard to investment products in digital assets.</p><p>While Israel
continues to work on formulating regulations for its crypto industry, public authorities in the country actively counter the use of digital
currencies for crimes. Recently, Israeli authorities <a href="https://www.financemagnates.com/cryptocurrency/crypto-terrorist-financing-israel-seized-millions-linked-to-iranian-lebanese-groups/" target="_blank" rel="follow">seized millions of
dollars</a> in crypto
allegedly linked to groups in Iran and Lebanon. In a separate action, it <a href="https://www.financemagnates.com/cryptocurrency/israel-seized-189-binance-accounts-linked-to-terror-groups/" target="_blank" rel="follow">confiscated 189 Binance
accounts</a> reportedly
linked to Palestinian and Islamist terror groups.</p><p>Meanwhile,
Israeli, like major countries across the world, is also <a href="https://www.financemagnates.com/cryptocurrency/israel-ties-digital-shekel-launch-to-us-and-eu/" target="_blank" rel="follow">considering the launch</a> of a central bank digital
currency (CBDC). However, the country has tied the launch of its CBDC, the
digital shekel, to similar moves in other
jurisdictions, especially in the United States and the European
Union.</p><p>New COO at Marex; LCH RepoClear's service merger; <a href="https://www.financemagnates.com/forex/news-nuggets-5-july-new-coo-at-marex-lch-repoclears-service-merger/" target="_blank" rel="follow">read today's news nuggets</a>.</p>

This article was written by Solomon Oladipupo at www.financemagnates.com.