- Defended in the case will pay $830,000 in taxes from the $2.5 million made from Bitcoin sales.
- Bitcoin and other cryptocurrencies have “a long way to go” to be treated as actual currencies for tax purposes.
The cryptocurrency space in Israel has been forced to deal with a ruling in a case that involved a tax dispute between the country’s tax authorities and the founder of a blockchain-based startup. This follows a major court case in May where a defendant argued that the $2.5 million made after the sale of BTC was not subject to tax.
The defendant wanted Bitcoin considered as a currency instead of a currency and that Bitcoin sales should have a tax-exempt since “Currencies are notably exempt from taxes on value fluctuations whereas assets are not.”
An Israeli District Court in Lod went ahead to disagree with the argument and how Bitcoin was being characterized. However, the court did not go into the nitty-gritty of speculating the value of Bitcoin and whether it will be used as a currency in the future. According to the court, the current law regards such a coin as Bitcoin to be an asset and not a currency.
The defendant was then ordered to pay $830,000 to the tax authorities. The court further stated that Bitcoin and other cryptocurrencies are far from being regarded as actual currencies at least for tax purposes.