Tax agencies around the world continue applying pressure on bitcoin and cryptocurrency companies to make their operations transparent to them. The latest example comes from Israel, where a local exchange with over 50,000 clients has been convinced to report its bigger traders to the national tax authority.
Bits of Gold to Report to Tax Authority
Tel Aviv based cryptocurrency exchange Bits of Gold has agreed to report on its ‘heavy’ users to the Israel Tax Authority, according to media reports from the country. The company will pass on info to the tax authority on anyone who traders a total of $50,000 or more over a one year period. It agreed to this after the authority carried out an onsite inspection of its operations at the exchange’s offices, targeting information on its bigger clients.
Exchanges operating in the country already have to report big trades to the Israel Money Laundering and Terror Financing Prohibition Authority, but that information doesn’t get to the tax authority easily as there are laws in place to prevent this to protect citizens’ privacy. Moreover, the Israel Tax Authority does not have the legal right to compel companies to report on their clients without their agreement and court precedents back this up, according to local newspaper Calcalist.
Putting the Squeeze
Further, according to these reports, this agreement with Bits of Gold is a sign of things to come as the Israeli tax authority now plans to approach more local companies and exchanges trying to reach similar arrangements. And this is just the latest initiative by the Israel Tax Authority in the cryptocurrency field.
Back in May it was reported that regional branches have sent out letters to those they suspect are trading bitcoin, demanding that the recipients divulge all of their involvement in the cryptocurrency market including all past transaction history and current holdings. People were being asked to list all exchange accounts and wallets they ever had and report their trade earnings. Additionally, the agency demands that people will reveal if they are engaged in mining.