On February 19, Israel's government released the notice which confirms that Tax Authority will regard cryptocurrencies as "a property, not a currency" in order to make it taxable. It is important to note that the Tax Authority detailed its position first in January of this year.
According to the circular, profits from cryptocurrencies will be subject to capital gains tax at rates between 20-25%, while miners or traders must pay 17% VAT in addition to capital gains tax.
The government of Israel started exploring the taxation of cryptocurrencies as early as 2013.
Today’s announcement was largely expected because of previous draft release. In January, Tax Authority announced another draft circular, which outlined potential ways in which the government could tax ICOs.