Israel crypto disclosures miss $1B tax target

Israel’s Tax Authority has reportedly collected disclosures covering only about $50 million in crypto-related capital gains, falling well short of expectations that a voluntary disclosure programme could generate up to $1 billion in tax revenue.

The disclosure framework, introduced in August 2025, offers immunity from criminal proceedings for eligible cryptocurrency holders who correct previous tax filings and pay outstanding liabilities before the August 31, 2026 deadline.

“In the cryptocurrency field, the difficulty of the absence of an anonymous track is even more acute,”

Said Prof. Bein Law, Office head of tax department Iftach Simhony.

Simhony added that taxpayers with a low perceived risk of detection have less incentive to participate because the programme does not provide certainty or anonymity during its initial stages.

The voluntary disclosure process is available to crypto holders whose assets were worth no more than the equivalent of $522,000 as of December 2024, with only 58 taxpayers reportedly using the mechanism so far.

According to the Bank of Israel’s financial stability report covering January to June 2024, Israeli residents held approximately $1 billion worth of cryptocurrency assets, highlighting the potential scale of undeclared holdings that may remain outside the tax system.

The developments come as policymakers in other jurisdictions continue reviewing cryptocurrency taxation frameworks, including proposed US legislation known as the PARITY Act, which would direct the Internal Revenue Service to consider a de minimis exemption for small digital asset transactions.