In a brief video, Adv. Doron Levy explores how cryptocurrency is influencing Israel’s approach to voluntary disclosure. He explains that crypto transactions occur outside traditional banking systems, which limits reporting to the Israel Tax Authority (ITA). With the increase in crypto values, the ITA is intensifying its efforts to establish tax collection practices in this growing sector.
Historically, voluntary disclosure has provided a way for individuals to declare previously unreported assets, but crypto presents new challenges for enforcement. Unlike conventional financial assets, cryptocurrencies can be transferred directly between users without involving banks, reducing the ITA’s ability to monitor these transactions. Levy notes that the ITA is adapting its strategy to close this reporting gap.