Israeli tax authorities received significantly fewer cryptocurrency tax corrections than expected under a voluntary disclosure program that provides criminal immunity to eligible taxpayers.
summary
- Israel’s cryptocurrency tax disclosure program received just 58 applications despite expectations of up to $1 billion in revenue.
- Globes reported that the disclosures covered about $50 million in crypto capital, far below official expectations.
- The program provides criminal immunity to eligible taxpayers who correct reports and pay taxes before August 31, 2026.
- A tax expert told Globes that the lack of an anonymous first stage may discourage cryptocurrency holders from filing their applications.
According to Wednesday Report from GlobesThe Israeli Tax Authority had expected the program to generate up to $1 billion in tax revenues from undeclared cryptocurrency profits. However, the authority has so far received disclosures covering only about $50 million in crypto capital, the report said.
Cryptocurrency disclosures fall short of tax authority expectations
Globes reported that only 58 taxpayers used the voluntary disclosure route to correct previous cryptocurrency tax returns. This number is still well below the level officials expected after implementing the policy in August 2025.
Under this measure, eligible cryptocurrency holders can avoid criminal proceedings if they correct their reports and pay the due tax in full. The protection only applies when the value of a taxpayer’s cryptocurrency holdings does not exceed the equivalent of $522,000 as of December 2024, Globes said.
The report added that taxpayers must make accurate disclosures and complete the tax payment before August 31, 2026. The low response has left the authority with a small share of the revenue it expected from digital asset gains undeclared.
The lack of an unknown path weakens motivation
Iftach Simhony, CPA and head of the tax department at Professor Bein’s law firm, told Globes that the procedure has a major weakness for cryptocurrency taxpayers because it does not involve an anonymous trail at the first stage.
Samhouni said the lack of anonymity becomes even more dangerous in cryptocurrency cases. According to his comments reported by Globes, taxpayers who do not believe their enforcement risk is high may have less reason to enter into the disclosure process before they have certainty.
The Globes report said that Israeli officials still believe that large amounts of profits associated with cryptocurrencies remain outside the tax system. She said authorities believe the $50 million disclosed is only a small portion of potential unreported assets.
Bank of Israel data shows significant holdings of cryptocurrencies
According to Bank of Israel According to the Financial Stability Report for January-June 2024, Israelis own crypto assets worth about $1 billion. This number gives context to the gap between expected voluntary disclosures and the amount reported to date.
This weak uptake also comes at a time when Israeli financial authorities are paying greater attention to digital assets. Such as crypto.news I mentioned previouslyHowever, Israel has moved towards stricter regulation of stablecoins, with the Bank of Israel examining how private digital currencies fit into the country’s future payments system.
At a recent financial conference, officials at the Bank of Israel said that the central bank is reevaluating the role of private digital currencies in daily transactions. Officials said stablecoins were moving beyond cryptocurrency trading circles and moving into payment discussions.
US lawmakers are considering a small tax relief for cryptocurrencies
outside Israel, Crypto tax The reports have also drawn attention in the United States. Members of the US Congress introduced the Parity Act in May, which would direct the IRS to review the minimum exemption for digital assets.
Under the proposed measure, US taxpayers would not be required to report certain small cryptocurrency transactions to the IRS. The proposal comes as governments continue to weigh tax enforcement against the practical burden of reporting routine digital asset payments.
