Israeli banks refuse payments from crypto investors
Due to deposit refusal investors are unable to pay taxes
Bitcoin investors in Israel are facing problems when it comes to paying their taxes. Due to fears around money laundering, Israeli banks have refused to accept income from crypto-currency trading profits as a deposit. As stated in Israeli newspaper Haaretz on August 6th, the banks are also afraid that the profits gained from BTC investments could have terrorist financing.
It should be noted that Israel doesn’t recognise bitcoin as a currency. The country imposes taxes on any earnings gained through crypto-currency trading. Bitcoin investors are asked to pay capital gains tax of 25% while companies should pay 47% but due to deposit refusals investors are incapable of paying them. Bitcoin investors continue to find difficulties in depositing the profits from their investments in the national currency in local bank accounts in Israel.
Haaretz highlighted the story of local BTC investor Ron Gross, a consistent BTC investor since 2011. He has made considerable profit from his Bitcoin investments and conscientiously reported his income to the Israel Tax Authority. In 2017 his bank Hapoalim started to decline bitcoin deposits to his account in Israel. The bank refusal implied that his profits were stuck in a Swiss bank.
Gross declared that he met with bank officers and showed them 70 pages of deposit records of Bitcoin earnings, but the bank continued to refuse to accept the funds. He stated: “I’ve tried working with almost all the banks, but the minute they hear the word Bitcoin they freeze up.”
Since he was unable to pay his dues to the Israeli tax authority, a lien has been put on his bank account, home, and scooters. He also declared that ‘the tax authority is aware of the problem, but they say the ball isn’t in their court.’
The amount of unpaid taxes from cryptocurrency revenues is 300 million shekels (more than $85.7 million). Tax payments have been put on hold until a solution can be found.