High-tech entrepreneur Moshe Hogag recently purchased a plot of five dunams in Kfar Shmaryahu from businessman Ilan Ben Dov for 70 million shekels - about 15% of the deal was paid in bitcoin.
Moshe Hogag has created a real movement around virtual currency (Bitcoin) (5,878.73 -4.67%). This movement is considered an exception and, as far as we know, in a real estate transaction and in such a significant amount.
According to the details of the agreement concluded between the parties, 10 million NIS of the total amount were transferred from Hogag's virtual wallet to complete the settlement. Ben Dov will be represented in the matter by attorney Geva Haviv and Adam Roeh of Caspi & Co.
Attorney Amir Cooper, a tax expert, among others, in the field of digital currencies, stated: "Payment for the purchase of land via Bitcoin is a transaction that the tax authority benefits from on both sides.
"The Authority considers bitcoin as a capital asset, whose use in payment of the transaction creates a tax obligation for the payer, as if they were selling the Bitcoin for shekels in a taxable transaction, and then using the shekels to purchase real estate. The volatility of the Bitcoin rate makes it difficult to determine the amount of capital gain to declare for the transaction.
Recently, the tax administration provided clarifications on this issue in a tax decision that dealt with a business accepting crypto coins as payment from its clients.
"The tax decision facilitates the daily operations of businesses, but many questions remain open, such as how to deal with a private individual who does not issue tax invoices and how to deduct withholding tax from someone who pays via Bitcoin. A stronger trend in the market is to use cryptocurrency as a means of payment.
Ironically, the increase in cryptocurrency transactions weakens the tax administration's position that crypto is an asset for which the profit is taxable; the more transactions there are, the easier it is to see that Bitcoin is essentially a currency for which the differentials are exempt.
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