Israel Bitcoin Meetup Group Message Board › Wire Transfer to MtGox is now subject to taxation?

Wire Transfer to MtGox is now subject to taxation?

Avihay E.
user 84177942
Tel Aviv-Yafo, IL
Post #: 1
Hi, maybe you can help me with the following issue:

I wanted to transfer money to MtGox. I did so two month ago, and everything was fine.

I tried to do it last week, but after submitting the appropriate papers, the clerk told me that I'm subject to income taxation, since I'm transferring money abroad. I think that it's the following tax:

https://www.bankhapoa...­

Has anyone encountered in such a problem? How can I make a wire transfer without paying 25% tax?

Thanks.
Ron G.
ripper234
Tel Aviv-Yafo, IL
Post #: 6
Your link doesn't say anything about a tax.
If anyone is asking for a tax on wire transfer, they are mistaken. Speak to your bank manager.
A former member
Post #: 1
You raise an interesting question that I have not seen discussed anywhere. Here is my (layman's) take on it.

For tax purposes I can see two main possibilities for categorizing bitcoins.
The first is a commodity like currency or a share or a bond. In that case they would be liable for capital gains tax (currently 25%) when sold.
The second possibility is a simple 'product', like anything else you buy on Amazon for example. In that case they would be liable for VAT when imported (even electronically). There is currently an exemption of $75US on personal imports. In Israel, gold coins are liable for VAT when imported and probably would also be liable for capital gains tax if sold at a profit. Some other countries like the UK exempt gold coins that are purchased for investment from VAT, however Israel specifically does not! This means that bitcoins may fall into this category. So it could end up being liable for both VAT and Capital gains tax.

There is a third possibility. If, for example, bitcoin's were declared by world banks to be illegal and their value crashed you might be able to set your losses off against profits elsewhere for tax purposes.

I am sure that some of you will think that all this is irrelevant since bitcoins are 'untraceable'. Do not be fooled. It would be easy for the tax authorities to get a list of all transactions to and from bitcoin exchanges. In that case, one day in the future you can expect a polite letter from the tax authorities requesting that you fill in your tax returns for the last seven years.

Having said all this I do not see why the bank would want to deduct 25% when making a purchase. If you get an explanation please post it.
Avihay E.
user 84177942
Tel Aviv-Yafo, IL
Post #: 2
Hi, thanks for your response, and sorry for my late one.

The link to the relevant tax is this one:

http://www.ynet.co.il...­

At least I think that this is the tax they were talking about in the bank...

None of you encountered with this tax request?
A former member
Post #: 2
Reading between the lines of this tax, it seems that though no actual tax needs to be paid in most cases, the tax authorities are using the threat of deduction at source it to force you to tell them for what purpose you are transferring money. In that way, if it is an investment (like Bitcoins maybe), they will have it on their books for future use.
I think that it is stretching their authority a bit far and is the kind of thing that one day someone may challenge in court, but until then you will have to get an ishur for each transfer. On the other hand they are trying to fight people hiding their income by moving it to investments abroad.
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