The judgment is important since it means gains made by selling the cryptocurrency will currently be responsible to capital gains tax, Globes notes.
Noam Copel, that founded the blockchain startup DAV, had purchased BTC in 2011 and sold a couple of decades after — making a gain of $2.9 million at the current rates.
During the court case, he had argued that bitcoin should be regarded as a foreign currency, as fluctuations in exchange rates aren’t taxed.
But the Israel Tax Authority (ITA) contended differently, with the company putting forward the idea that monies should possess some physical manifestation under the country’s laws.
Judge Shmuel Bornstein ruled that Copel had failed to prove that bitcoin met this condition, or that it might be utilized as a viable alternative to fiat if he had sold the cryptocurrency six years back. But he indicated the court’s attitude may alter — describing his ruling as”for now.”
As things stand, the entrepreneur should now pay tax on $830,000 of their profits he created; however, Copel does have the option of appealing to Israel’s Supreme Court.
The ITA had first outlined plans to tax cryptocurrencies as land in February 2018.
Earlier this month, the United States Internal Revenue Service said it was prioritizing issuing advice on cryptocurrencies after politicians in Congress cautioned there is still much ambiguity regarding how the strength should be taxed.