14 September 2018 Israeli Tax Authorities address issues regarding issuance of Utility Tokens, blockchain technologies and cryptocurrencies, including related tax benefits Recently, the Israeli Tax Authorities (ITA) published a Tax Circular explaining its position towards the tax implications of "digital tokens" issued for the provision of services or products under development (Utility Tokens) as part of Initial Coin Offerings (ICOs)/Token Generation Events (TGEs), including the tax aspects associated with such services or products (the Tax Circular). A previous Tax Circular presented the ITA's view that a virtual currency (such as Bitcoin, Ethereum, etc.) is an "asset" within its meaning in the Income Tax Ordinance, and therefore subject to capital gain tax rules upon disposal (unless the activity generating such income constitutes a business, which case the income is treated as a business income, with the relevant income tax and value added tax (VAT) implications). Document ID: 2018-1818 |
