The Cold, Hard Reality of Voluntary Disclosure

If you’re reading this, you’ve likely come to the realization that every cryptocurrency transaction—profit or loss—must be reported to tax authorities. In some countries, like Israel, even purchasing crypto requires opening a file with the Tax Authority. This means almost any change in your crypto holdings is a taxable event. Although there was a temptation in the past to keep those crypto gains to yourself, as we speak, the tax authority is catching up with us, and if you want to sleep well at night, it may be easier to voluntarily disclose crypto gains.

Is Crypto Money?

Over the past decade, most major countries have developed tax laws for cryptocurrencies. How they classify crypto varies widely:

  • Asset or property – Most common classification
  • Currency or legal tender – Recognized in some jurisdictions
  • Commodity or security – Categorized as such in select countries
  • Tax-free – Rare but possible in a few locations

Timeline of years following initial release of Initial policy by major countries throughout the world

Sources: Reuters, Token Tax, PwC, Investopedia. Thomson Reuters

Taxable Events – Did You Trade or Sell?

Any sale or exchange of cryptocurrency, whether through a private wallet or a trading platform, is a taxable event that must be reported.

Crypto Taxes in Israel

Income earned in cryptocurrency—staking rewards, mining, farming, or crypto-based payments—is taxable. Proper documentation is essential to ensure compliance.

In Israel : What Do I Need to Fill Out Form 909?

You’ll need:

  • Public wallet addresses used
  • Names of exchanges involved
  • Type of currency traded

What Evidence is Required for Filing?

According to the Israeli Tax Authority, you must retain documents verifying the source of income. A crypto report helps validate your transactions and ensures compliance with the Income Tax Ordinance and VAT Law.

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Complexity Made Easy

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About CryptoTrail

CryptoTrail is a leading advisory firm dealing in matters of cryptocurrency taxation, blockchain forensics and compliance. Led by Evan Spicer, a blockchain analytics professional, we provide tailored guidance based on your financial situation.

Disclaimer: Using our system or the information on this site does not replace professional tax advice or official reporting to relevant authorities.