Bitcoins: Currency for Criminals?

30 September 2013 | By Tal Pavel |

Some of Bitcoin enthusiast Mike Caldwell's coins are pictured at his office in Sandy, Utah

There have been reports in the Israeli media over the past few days that Israel’s tax authorities are examining the possibility of imposing taxes on profits earned from transactions conducted with bitcoins. At the same time, it has also been reported that banks are limiting the use of this currency. Since bitcoins are not currently recognized by Israel as legal tender, issues pertaining to this currency are especially complicated. With no supervision over bitcoin transactions and no requirement to report trade in the currency, questions relating to their taxation are in a state of limbo.

Following a decision by a federal court in Texas, the United States recognized the virtual currency including in all matters pertaining to taxation in August 2013. So did Germany, which established the first bitcoin trade platform in Europe, in an act of collaboration between the country’s Finance Ministry and a local bank.


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