How is crypto taxed in Israel?

Israel crypto tax rules start from one decision, that crypto is property and not money. The Israel Tax Authority (ITA) set out that view in Circular 05/2018, and Israeli courts have upheld it. As of October 2026 there is no separate crypto tax law, so general income tax rules apply.

Why does Israel treat crypto as an asset?

The distinction matters because Israeli tax law exempts gains from exchange rate movements in foreign currencies. If bitcoin were a currency, a rise in its value might escape tax. The ITA rejected that reading, and a court later dismissed a taxpayer's claim that bitcoin was a nontaxable currency. Selling crypto is therefore treated as selling an asset, and the profit is a capital gain.

What is the Israel bitcoin capital gains tax rate?

For a private investor, gains on selling crypto are generally taxed at 25% of the real gain, meaning the gain after adjusting for inflation. Reports on the 2018 circular said investors were expected to keep records of each sale and purchase, with dates and amounts, so the gain can be checked. The guide to crypto cost basis explains how a gain is usually measured.

If crypto activity reaches the level of a business, for example frequent trading as a main occupation, profits are taxed as business income at ordinary marginal rates, which reach close to 50% at the top. Reports on the circular said a person trading at business level is classed as a financial institution for VAT.

On top of that, PwC lists two surtaxes for 2026:

• 3% on annual taxable income from all sources above ILS 721,560
• an extra 2%, introduced from 2025, on capital income such as capital gains, dividends and interest above the same threshold

How do you pay Israel Tax Authority crypto tax if a bank refuses the money?

Some Israeli banks have refused deposits from crypto sales. The ITA offers Form 909 for individuals in this position. A person who made a profit selling crypto, whose bank would not accept the funds or open an account, can file the form with the tax calculation, proof that the original money came from legal sources, and a history of the coins. Once an assessment is agreed, the tax can be paid straight into the ITA's account at the Bank of Israel. Companies cannot use this route. For the practical side of selling, see how to sell crypto for cash.

What happened with the crypto voluntary disclosure program?

In August 2025 the ITA opened a voluntary disclosure procedure, running until August 31, 2026, that offered immunity from criminal proceedings to people who declared hidden income and paid the tax. It covered crypto, required applicants to list their wallet addresses, and had a fast track for smaller crypto amounts. Globes reported in June 2026 that take-up was far below the state's expectations. For other countries' approaches, see crypto tax around the world.

Rules differ by country and change often. Check the tax authority or a qualified professional for your own situation.