Adv. Doron Levy appears in a short video to discuss how the latest wave of voluntary disclosure in Israel is partly driven by the rise of cryptocurrency. He explains that the crypto world functions outside of traditional financial structures, leaving the Israel Tax Authority (ITA) without the usual access to transaction data. As crypto valuations rise, the ITA is working to bring tax collection efforts up to speed in this area.
Voluntary disclosure programs have long allowed taxpayers to report previously hidden income, but the growth of crypto has introduced new challenges for tax authorities. Unlike traditional assets, crypto can be easily traded across borders without using banks, making it difficult to track and report. The ITA has noticed this and is actively looking for ways to address the issue.
Levy mentions that blockchain technology, while decentralized, provides some transparency, as transactions are recorded on public ledgers. However, the challenge remains in linking these transactions to individual taxpayers. The ITA is considering various tools and partnerships to understand this digital landscape better and trace taxable events.
