Israeli Draft Bill Would Nix Hefty Capital Gains Taxes on Bitcoin

Israeli bitcoiners take note: A handful of Knesset members are seeking to ease Israel's hefty taxation of cryptocurrencies.

Four Knesset members from the nationalist Yisrael Beiteinu party on Tuesday introduced a draft bill that would effectively end Israel's 25% capital gains tax on bitcoin by redefining certain "distributed digital currencies" as currency, instead of a taxable asset.

• The proposed re-designation applies to cryptocurrencies with: a distributed issuance network, a 1 billion shekel ($288 million) market cap or more, a general use purpose and an independent origin story.
• Bitcoin and certain other cryptocurrencies meet these criteria, according to the bill authors: Oded Forer, Evgeny Sova, Yulia Malinovsky and Alex Kushnir.
• "This regulatory clarity will create commercial certainty and allow more digital currencies to enter the Israeli market," the lawmakers wrote in their proposal.
• Defining cryptos as currency would simplify Israeli bitcoiners' tax burden and make qualifying coins a more attractive payment mechanism, according to the measure.
• The Yisrael Beiteinu party is part of Israel's parliamentary opposition, making passage unlikely without backing from members of the majority.
• Forer did not respond to a request for additional comment.

Read more: Israeli Court Rules Bitcoin Is an Asset in Feud Over Tax Payment