TLDR:

  • Israel’s parliament is considering a bill to give tax benefits to foreign crypto investors and local crypto workers.

  • The bill would exempt foreign residents from capital gains taxes on crypto sales and reduce tax on crypto options for employees.

  • The bill has the support of the coalition government and aims to promote the crypto industry in Israel.

Israel’s parliament, the Knesset, is debating a bill that could make the country more attractive for foreign crypto investors and local crypto workers. The bill would grant tax exemptions and reductions to those who deal with digital currencies, according to a report from CoinDesk.

The bill passed a preliminary reading on Wednesday, which means it will move to a committee stage before returning to the plenum for further readings and votes. The bill was proposed by Dan Illouz, a lawmaker from the Likud party, which is part of the coalition government led by Prime Minister Benjamin Netanyahu.

According to Illouz, the bill aims to promote the crypto industry in Israel and make it more competitive with other countries. He said that currently, foreign residents who sell crypto assets have to pay capital gains taxes in Israel, which discourages them from investing in Israeli crypto companies. He also said that local workers in the crypto industry have to pay double the tax on their options compared to workers in the traditional high-tech industry.

The bill would change that by exempting foreign residents from capital gains taxes on crypto sales, as long as they are not Israeli citizens or residents. It would also reduce the tax rate on crypto options for employees from 25% to 15%, which is the same rate as for high-tech workers.

Illouz said that the bill has the support of the coalition government and the finance ministry, and that he hopes it will pass quickly. He said that the bill would benefit both the crypto industry and the Israeli economy, as it would attract more foreign investment and innovation.

Israel has been active in regulating crypto in recent years, as it sees an opportunity for its development and growth. In January, the Israel Securities Authority proposed draft amendments to include digital assets in existing financial laws and expand the definition of securities. The regulator said that the advanced technology in crypto could lead to economic efficiency, cost reduction, and information optimization.