Israel Tax Authority Dissatisfied with Voluntary Cryptocurrency Disclosures

The Israel Tax Authority is concerned that the voluntary declaration process for cryptocurrency profits is not yielding the expected results. Although the government has granted immunity from criminal prosecution to individuals who correct their reports, taxpayer participation remains low. Cointelegraph.com reports on this. reports .

According to Globes, Israeli officials had expected up to $1 billion in tax revenue under the 'voluntary disclosure' policy effective until August 2025. However, reports of income from crypto capital to date represent only a tiny fraction of the anticipated amount. Data indicates the tax authority has received reports on just $50 million in crypto assets, while unreported funds could amount to billions of dollars.

According to tax expert Iftach Simhony, the lack of anonymity in the process is a major obstacle. If the risk level for taxpayers is high and the procedure does not guarantee clarity or anonymity at the initial stage, the incentive to voluntarily disclose information diminishes. So far, only 58 individuals have attempted to amend their tax returns using this procedure.

According to the Bank of Israel's Financial Stability Report for the first half of 2024, citizens hold approximately $1 billion in crypto assets. Meanwhile, US Congress members are also considering the PARITY Act bill, which would exempt small crypto transactions from IRS reporting requirements.