The Israeli government published a draft plan, which described possible ways of taxing the ICOs profits.
The plan was published on Wednesday by the IRS. It proposes to tax the ICO with value-added tax (VAT). The document specifies that, according to the current legislation, goods and services offered to foreign citizens will not be taxed.
According to a report published on the official website of the IRS, cryptocurrencies in this plan are not directly affected.
In addition, the plan details the classifications of blockchain companies with an emphasis on the types of goods and services offered, as well as on what model of profit they use.
It also says that under current legislation, the subject of accounting regulation will be sales of tokens, the profit of which is more than 15 million new Israeli shekels ($ 4.4 million).
The amount of tax may change if the company determines its tax liabilities not during, but at the end of the year.
In cases where the tax liability is determined on a cash basis, at the end of the year, the buyer or recipient of a service is a resident of Israel or vice versa, it is possible that the tax rate for the transaction will change according to the provisions of the VAT Law.
ICO Draft Taxation Plan
The document notes that investors selling already purchased to ICO tokens will also become subjects of taxation. Groups that trade on behalf of registered companies, especially for tax purposes, will be "classified and registered as financial institutions".
The plan emphasizes that in the future it can be changed. The IRS is awaiting public comment on the provisions submitted.