Crypto taxation in Israel - the full guide

Israel does not have a dedicated crypto tax law at the time of writing. Instead, the tax treatment is built from four layers: the Income Tax Ordinance (פקודת מס הכנסה), a 2018 professional circular of the Israel Tax Authority (רשות המסים, the ITA), one District Court ruling from 2019, and a set of administrative procedures that deal with the hardest practical problem, getting the money and the tax into an Israeli bank. A government bill from January 2026 would write the main rules into the Ordinance itself, but at the time of writing it was still a bill. ^[1][7][8][9]

This guide follows the Hebrew terms you will meet on forms and in meetings with a CPA: רווח הון (capital gain), מס יסף (surtax), דוח שנתי (annual return), מקדמה (advance payment), עלות or מחיר מקורי (cost basis), שווי or תמורה (value, consideration).

Classification

The starting point is ITA Income Tax Circular 05/2018, "Taxation of activity in decentralized payment instruments (so called virtual currencies)", dated 17 January 2018. The circular's central position is that a coin such as bitcoin is not "currency" and not "foreign currency". Those terms are not defined in the Ordinance, so the ITA borrows the definitions from the Bank of Israel Law, under which "currency" is the new shekel and "foreign currency" means banknotes or coins that are legal tender in a foreign state. A decentralized digital unit is neither. ^[1]

Because it is not currency, the ITA treats it as a "נכס" (asset, property) under section 88 of the Ordinance, which covers "all property, real or movable, and every vested or contingent right or benefit". The circular says a decentralized payment instrument is the property of the person holding it and therefore falls within that definition. A sale of such an asset is a capital event under Part E of the Ordinance and is subject to capital gains tax at the rates in section 91. ^[1][7]

The same circular adds two important qualifications. First, if a person's crypto activity rises to the level of a business (עסק), the income is classified as ordinary business income under section 2(1) and taxed at the individual marginal rates of section 121 or the corporate rate of section 126. Whether activity is a business is decided under the business tests developed in case law, not by a fixed number of trades; the circular does not list crypto specific criteria. Second, coins received through mining are always treated as business income. ^[1]

The 2019 Kopel ruling confirmed the ITA position in court. In ע"מ 11503-05-16 Kopel v. Rehovot Assessing Officer, the Central District Court in Lod (Judge Dr. Shmuel Bornstein) rejected the appeal of a taxpayer who had bought bitcoin in 2011, sold in 2013 for a profit of about ILS 8.3 million and argued that the gain was an exempt exchange rate difference under section 9(13). The court held that bitcoin is an asset and not a currency, among other reasons because the taxpayer had not shown that it performs any of the accepted functions of money (medium of exchange, store of value, unit of account), and dismissed the alternative arguments that bitcoin is a linked security or that the gain is an exchange difference. Costs of ILS 30,000 were awarded against him. ^[9][10][11] We could not verify, at the time of writing, whether a Supreme Court decision on the merits exists; the government bill of January 2026 still cites the District Court ruling as the governing precedent. ^[8]

That bill is the next layer. On 19 January 2026 the government published the Income Tax Ordinance Amendment Bill (No. 285) (Digital Asset), 5786-2026. It would add a definition of "נכס דיגיטלי" (digital asset) to section 88, covering a digital representation of value or a right that can be transferred and stored digitally and uses distributed ledger technology, excluding Israeli legal tender, foreign currency and securities. It would define "foreign currency" in section 1 so that only banknotes, coins or their digital representation issued by a state's monetary authority count, which closes the section 9(13) argument even if a foreign country adopts a crypto asset as legal tender. It would also add source rules in section 89(b): a gain on a digital asset is Israeli source if, among other things, the seller was an Israeli resident on the acquisition date. The explanatory notes say the aim is to clarify that a digital asset is a capital asset whose sale is subject to capital gains tax, while business level activity stays ordinary income. ^[8][31] At the time of writing this is a pending bill, not law. The bill was published in the official Knesset bills gazette (הצעות חוק הממשלה 1925). The Economic Efficiency Law for 2026, published in the statute book on 31 March 2026, enacted Ordinance Amendments 286 to 288 and does not contain the digital asset provisions, and we found no record that bill 285 itself had passed at the time of writing. ^[34][35] Earlier drafts of the same idea were published as a memorandum of law in November 2024. ^[25][26][27]

For VAT the circular reaches a parallel conclusion: a decentralized payment instrument is an intangible asset for the VAT Law, not currency and not a security. An investor whose activity is not a business is not subject to VAT on sales. A person whose activity has business characteristics is to be registered as a "financial institution" (מוסד כספי) for VAT purposes, and a miner as a "dealer" (עוסק). A dealer who simply accepts crypto as payment for goods or services charges VAT on the goods or services as usual, and the later change in value of the coins received is not subject to VAT unless the crypto activity itself becomes a business. ^[1]

Rates and surtax

For an individual whose activity is not a business, section 91(b)(1) sets the tax on real capital gain (רווח הון ריאלי) at a rate not exceeding 25 percent. ^[7] The ITA's own instruction for the bank refusal procedure tells assessing officers to enter the gain so that "the computer calculates 25 percent tax" on the amount, which confirms that 25 percent is the rate the ITA applies to individuals' crypto gains in practice. ^[3] Strictly, 25 percent is a ceiling: section 91(b)(1) taxes the gain at the individual's marginal rate, treating it as the top slice of income, capped at 25 percent. For most individuals the result is 25 percent, because income that is not from personal exertion starts at 31 percent in the 2026 brackets; an individual aged 60 or over can use the lower brackets (10, 14 and 20 percent in 2026) on any income, so the rate can be lower in that case. Ask a CPA if this applies to you. ^[7][21]

The 30 percent rate in section 91(b)(2) applies to a real capital gain on the sale of a security in a body of persons where the seller is a "substantial shareholder" (בעל מניות מהותי), meaning someone holding directly or indirectly at least 10 percent of any means of control. ^[7] For a coin held directly this rate is generally not relevant: a coin is not a security in a company. Whether a token that represents a right in a company could trigger it is one of the open questions below.

If the activity is a business, the gain is ordinary income taxed at the individual's marginal rates under section 121, which reach 47 percent at the top bracket in 2026, or at the 23 percent corporate rate under section 126 if a company holds the coins. National Insurance contributions may also apply to business income. ^[1][21][27]

On top of either rate sits מס יסף, the surtax on high incomes in section 121ב of the Ordinance. The rules changed from the 2025 tax year, so the details matter:

• Section 121ב(a): an individual whose taxable income in the tax year exceeds the threshold pays an additional 3 percent on the part above the threshold. Taxable income here includes income from all sources, including capital gains (excluding the inflationary amount), interest and dividends. ^[6][7]
• Section 121ב(a1), added by the Economic Efficiency Law (Legislative Amendments to Achieve the Budget Targets for 2025) (Freezing Tax Updates and Surtax), 5785-2024, passed on 26 December 2024: an individual whose taxable income from capital sources (הכנסה חייבת ממקורות הוניים) exceeds the same threshold pays a further 2 percent on the capital source part above the threshold. This applies to income produced or received from 1 January 2025. Capital source income is taxable income other than income from business, employment or personal exertion, for example dividends, interest, rent that is not a business, and capital gains. ^[6][20]
• Threshold: the ITA's Implementation Instruction 5/2025 states the threshold as ILS 721,560 for 2024 and uses the same figure for 2025. The same law froze the annual indexation of amounts for 2025 through 2027, and the instruction says the freeze applies to the surtax threshold too. A 2026 practitioner summary accordingly lists ILS 721,560 as the threshold for the 2026 tax year. ^[6][21] We did not find a separate ITA publication stating a 2026 figure; the number is the verified 2024 figure carried forward by the statutory freeze.

Put together: a crypto gain of an individual that is capital in nature is taxed at up to 25 percent (25 percent in most cases), and the part of total income above the threshold carries a further 3 percent, plus a further 2 percent if capital source income on its own exceeds the threshold. That is an effective 30 percent on the top slice, which is why practitioners describe the surtax on capital income as "5 percent". The ITA instruction includes worked examples; one shows an individual with ILS 400,000 salary, ILS 500,000 dividends and ILS 600,000 interest paying 3 percent on ILS 778,440 and 2 percent on ILS 378,440. ^[6] Section 121ב(b) states that the 30 day advance of section 91(d) does not include the surtax, which is settled through the annual return. ^[6]

Taxable events including crypto-to-crypto

A taxable event in Israeli capital gains law is a "מכירה" (sale). Section 88 defines a sale broadly: it includes exchange (חליפין), waiver, assignment, transfer, grant, gift and redemption, among other acts, not just a sale for cash. ^[7] Applied to crypto, the following events are generally treated as sales:

• Selling a coin for shekels, dollars or any other fiat currency. ^[1]
• Paying for goods or services with a coin. The circular treats this as a barter transaction: at the moment of payment the buyer sells the coin and buys the goods or service, and the consideration is the fair value in shekels of the coin, or the listed price of the goods if there is one. ^[1]
• Swapping one coin for another, including into or out of a stablecoin. The circular lists conversion into another decentralized electronic means among the uses of a coin and applies the barter logic to any transaction where the consideration is paid in crypto; section 88 expressly includes exchange within "sale". Israeli CPA guides consistently treat a BTC to ETH swap or a USDT to another coin conversion as a disposal of the first asset followed by a purchase of the second. ^{[1][7][23][24]} Note that the ITA has not published a separate ruling that uses the word "swap"; the conclusion follows from the statutory definition and the circular's barter rules.
• Receiving a coin as payment for goods or services you supplied. The seller records ordinary income at the shekel value, and that value becomes the cost basis of the coin received. ^[1]

Events that are generally not sales: buying a coin with shekels, and moving coins between wallets or exchange accounts that you own, since ownership does not change. There is no ITA publication that says this expressly for crypto; it follows from the definition of sale, and the burden of documenting that both wallets are yours is on you. Gifts are within the definition of sale and have their own rules in section 97; do not assume a gift is tax free without a CPA. ^[7]

Holding a coin while its price rises creates no tax. Israel taxes realized gains only. The same is true of losses: a paper loss is not deductible until it is realized. ^[7][23]

Cost basis and calculation

The arithmetic is set by the definitions in section 88. The "מחיר מקורי" (original price) of a purchased asset is the amount the taxpayer spent to acquire it. The "תמורה" (consideration) is the price that would be expected from a sale by a willing seller to a willing buyer, in practice the actual sale price in an arm's length transaction. "רווח הון" (capital gain) is the amount by which the consideration exceeds the balance of the original price. The "רווח הון ריאלי" (real capital gain) is the capital gain minus the "סכום אינפלציוני" (inflationary amount), which is the part of the gain that reflects the rise in the consumer price index between purchase and sale. ^[7] For crypto this means the cost basis is what you paid in shekels including acquisition fees, the proceeds are what you received in shekels, and only the real gain is taxed at 25 percent. In a barter transaction the circular requires the consideration to be set at the fair value in shekels of the coin at the time of the transaction. ^[1]

Which lot did you sell? If you bought a coin several times at different prices and sold only part of your holding, you need a method to decide which units were sold. The ITA has not published a binding rule for crypto. Its Implementation Instruction 06/2024 tells assessing officers to "check the method the taxpayer used in computing taxable income (FIFO/LIFO, weighted average, and others)", which shows that the ITA expects a consistent, documented method rather than one mandated method. ^[3] Practitioner guides describe FIFO (first in, first out) as the method accepted by the ITA and the one most commonly used. ^[23] If you plan to use specific identification or a weighted average, agree it with your CPA before you file and apply it consistently.

A worked example with hypothetical numbers

All figures below are invented for illustration. They are not real prices, and the inflation adjustment is simplified.

Dana buys Coin A in two lots on an Israeli exchange: on 10 March she pays ILS 20,000 for 2 units (ILS 10,000 each) plus a fee of ILS 100; on 20 June she pays ILS 15,000 for 1 unit plus a fee of ILS 75. Her cost basis per lot is ILS 20,100 for lot 1 and ILS 15,075 for lot 2. On 5 November she sells 2.5 units for ILS 50,000 and pays a sale fee of ILS 250, so net proceeds are ILS 49,750.

Under FIFO she sells all 2 units of lot 1 and 0.5 unit of lot 2. The cost of the units sold is ILS 20,100 + (0.5 x 15,075) = ILS 27,637.5. Her nominal capital gain is 49,750 - 27,637.5 = ILS 22,112.5. Suppose the CPI rose by 2 percent between purchase and sale; the inflationary amount is roughly 2 percent of the cost, about ILS 553, and is exempt. The real gain is about ILS 21,560, and tax at 25 percent is about ILS 5,390. Dana has 0.5 unit of lot 2 left with a cost basis of ILS 7,537.5.

Now suppose that on 5 November, instead of selling for shekels, Dana swapped the 2.5 units for Coin B worth ILS 50,000 at that moment. The tax result is the same: the swap is a sale of Coin A for a consideration of ILS 50,000, and Coin B starts with a cost basis of ILS 50,000. If Coin B later falls and she sells it for ILS 40,000, she realizes a capital loss of ILS 10,000 in that later year. ^[1][7]

Two practical points follow. First, every event needs a shekel value at that date and time, including events priced in dollars or in another coin, so you need a documented exchange rate source. Second, the surtax is computed separately on the annual return from total income and is not part of the 25 percent calculation. ^[6]

Reporting, forms and deadlines

There are two separate reporting duties, and the second one surprises many people.

The annual return (דוח שנתי). Section 131 lists who must file, starting with an Israeli resident individual who was 18 or older at the start of the tax year; regulations exempt many salaried employees from filing, and as practitioners describe it the exemption is built around income that has been fully taxed at source (we did not check the regulations themselves; not verified from primary source). Crypto gains are not taxed at source, so a person with a crypto sale during the year generally needs to file. The return for individuals is Form 1301, and capital gains that were not taxed at source are reported on the capital gains appendix, Form 1399. The ITA's service page describes Form 1399 as the notice of sale of an asset under section 91, filed within 30 days of the sale, including for a loss. ^{[7][23][24][33][36]} Section 132(a) sets the statutory filing date as 30 April of the following year. The ITA regularly announces extensions, in particular for online filing, so check the ITA notice for the specific year; practitioner guides commonly cite the end of May for online filers. ^[7][23] The return for the 2025 tax year is filed during 2026.

The 30 day report and advance (מקדמה). Section 91(d)(1) says that when an asset is sold, the seller must file a report with the assessing officer within 30 days of the sale on the form set by the Director and pay an advance equal to the tax on the gain under section 91. Since Amendment 147 took effect on 1 January 2006 the report is due for every sale, including a sale at a loss; the advance is due only if there is a gain. The duty does not apply to listed securities from which tax was withheld at source, which is why most investors in Israeli shares never meet it. Crypto is not a listed security and no tax is withheld, so each sale, swap or payment in crypto formally triggers a 30 day report, in practice on Form 1399. If no report is filed, the assessing officer may demand it within 7 days and may determine the cost, proceeds and advance. ^[7][22][24] Practitioner guides acknowledge that many investors report only once a year in the annual return and warn that this does not comply with the 30 day rule; interest and indexation accrue on late tax. ^[23][4] Ask your CPA how to handle frequent trading; one common approach is a consolidated report and advance shortly after each month or quarter, but it is a matter of practice and agreement with the assessing office, not a published rule.

Form 909. This form, titled "Report on activity in virtual currencies for the tax year", is not a general crypto return. It belongs to the bank refusal procedure described in the banks chapter below and is filed with the annual return by a taxpayer who wants to pay the tax from a foreign account because an Israeli bank refused the funds. It asks for the type of coin, proceeds, cost, taxable income and tax, the names of the exchanges and service providers used, the public addresses of the wallets used, the source of the funds that financed the purchases, and a working paper tracing the movement of the coins over the holding period. ^[3][4]

Business activity. If your activity is a business, you are a self employed person for income tax, VAT and National Insurance purposes, with bookkeeping and periodic advance obligations that are outside the scope of this page. ^[1]

Staking and rewards

This is the area with the least official guidance. Circular 05/2018 addresses mining and says mined coins are business income. It says nothing about staking rewards, airdrops, lending interest, liquidity provision or other DeFi income, and we found no later ITA circular, position paper or published ruling that does, at the time of writing. ^[1]

Israeli CPA guides generally apply the mining logic: rewards are ordinary income when received, measured at their shekel value on that day, and that value becomes the cost basis of the reward coins for a later capital gain. ^[23] An alternative reading, that rewards are a capital accretion with a zero cost basis taxed only on sale, has been argued but has no official support. The character of the income also matters for the surtax: income from a business or from personal exertion counts toward the 3 percent layer but not toward the 2 percent capital source layer, while capital gains and other income that is neither business nor personal exertion count toward both. So if rewards are treated as business income they stay out of the 2 percent layer, and if they are treated as capital or other passive income they may not. ^[6] Because none of this is settled, document every reward (date, amount, shekel value, protocol or platform) and have a CPA decide the treatment before you file. Banks also ask for the origin of coins obtained through mining or participation in an issuance, so the same records serve twice. ^[14]

Losses

A capital loss on crypto is recognized when it is realized, that is when the coin is sold, swapped or spent for less than its cost basis. Section 92(a)(1) provides that a capital loss is set off first against real capital gains of the same year, and that each remaining shekel of loss is set off against 3.5 shekels of taxable inflationary amount. Losses can be set off against capital gains from any asset, so a crypto loss can shelter a gain on shares, and the reverse; one ordering rule to know is that a loss on an asset located outside Israel is set off first against foreign capital gains (section 92(a)(3)), and where a crypto asset is located for this purpose has no official answer. Section 92(b) allows a loss that could not be used in the year to be carried forward and set off against capital gains only in the following years, one after another, and only if a return under sections 131 and 132 was filed for the year in which the loss arose. ^[7][23]

What losses cannot do: they cannot be set off against salary or business income, and an unrealized fall in price is not a loss. A loss must be reported to be used; the 30 day report applies to sales at a loss as well, and practitioners stress that an undocumented or unreported loss is at risk of not being recognized. ^[7][22][23] Whether coins lost through a hack, a collapsed exchange or lost keys constitute a deductible capital loss, and in which year, has no published ITA answer; see the open questions below.

Transferring proceeds to Israeli banks and source-of-funds documentation

For years the practical bottleneck in Israel was not the tax but the bank: proceeds from crypto sales were refused, and sometimes the tax payment itself could not be made. Three developments shape the situation at the time of writing.

Bank of Israel Directive 411. The Banking Supervision Department amended Proper Conduct of Banking Business Directive 411 on anti money laundering and terror financing by adding section 87A on payment services connected to customers' virtual currency activity (draft of 10 March 2022; final circular C-06-2706 of 9 May 2022, in force within six months of publication). Under it a bank must perform a dedicated risk assessment for virtual currency transfers, set policies and procedures, and may not refuse a transfer only because it is crypto related when the virtual currency service provider involved holds an Israeli licence from the Capital Market Authority. The bank must determine the "coin paths" (נתיב המטבע הווירטואלי) it will accept, and must inquire into the source of the funds used to buy the coins and the path the funds took from purchase to deposit; the 2022 text requires an explanation from the customer once activity exceeds a cumulative ILS 100,000 per year, with written evidence where needed, such as confirmation from the service provider or an external expert. Stricter treatment is expected for activity that involved conversion between coin types, mixers, transfers between several providers without a reasonable explanation, or coins with a higher degree of anonymity, and banks must set a separate policy for P2P activity. Banks must publish the key points of their policy and inform a customer of it immediately after, and if possible before, the customer's first transfer to a crypto service provider. ^[12][37] The Supreme Court, in a January 2023 decision in the Arev case against a bank that had refused a deposit, treated the bank's appeal as theoretical because Directive 411 now governs and banks can no longer refuse crypto funds across the board. ^[15] On 7 October 2026 the Banking Supervision Department published a final amendment to the directive (accompanying circular 2862), effective 1 May 2027. Its regulatory report states that a bank may not refuse payment services across the board only because the funds are connected to virtual currencies and must examine each transaction individually by customer, complexity, coin and service provider; it cancels the ILS 100,000 annual trigger for checking source of funds and coin path in favour of checks scaled to risk, sets risk increasing and risk reducing factors and strengthens disclosure to customers. Until 1 May 2027 the 2022 text still applies. ^[38] A news report adds, quoting the CEO of an Israeli exchange rather than the regulator, that the new text addresses stablecoins and treats an Israeli licence as a risk reducing factor; we did not verify those two points in the regulator's text. ^[13]

What banks actually ask for. Bank Hapoalim's published policy is a useful template of what to expect, with the caveat that each bank sets its own and updates it over time. Funds are accepted only from the customer's own account at a licensed Israeli virtual currency service provider or at a supervised financial body acceptable to the bank (the bank's annex listed Bits of Gold, "B2C" (as written in the annex), Altshuler Shaham Horizon, Kraken and NYDFS licensed entities at the time of writing). The customer may be asked to complete a dedicated questionnaire on the nature and scale of the activity, the source of funds and the coins involved. Documents of the "path" of the money and coins include: proof that the purchase was funded from a bank account in the customer's name, statements from the provider showing purchases, conversions and sales, evidence of tax reporting in the customer's countries of residence, and in some cases an external expert's report covering source of funds, coin types, wallet movements, buy and sell prices and tax reporting. The bank states it will not accept funds whose path is unclear, for example privacy enhancing coins or use of mixers, or where the pattern shows many transactions with unregulated counterparties, cash transactions, unusual wallet hopping or mismatches between transaction dates and exchange rates. Coins obtained through mining or participation in an issuance need evidence of how that activity was financed. ^[14]

The ITA procedure when a bank still refuses. On 31 December 2023 the ITA published, together with the Bank of Israel and the Anti Money Laundering Authority, a temporary procedure for receiving tax money from gains on decentralized payment instruments, followed on 3 April 2024 by Implementation Instruction 06/2024 and Form 909. It applies only to tax on crypto activity and only when the taxpayer proves that at least one Israeli commercial bank refused the funds, including by refusing to open an account. The taxpayer files Form 909 with the annual return, the assessing officer fixes the liability by assessment agreement or accepts the self assessment, the tax is paid in shekels only from a foreign account in the taxpayer's name (or a crypto exchange, brokerage or other financial service provider account that can be linked to the taxpayer) into the ITA's account at the Bank of Israel, and the ITA's professional, investigations and collection divisions each run checks, including sanctions list screening and a review of the source of funds and the coin path. The taxpayer must consent that tax paid under the procedure is never refunded, even if losses, deductions or credits later emerge, waives confidentiality toward the Anti Money Laundering Authority, the police and the Bank of Israel, and acknowledges that the procedure gives no criminal immunity. ^{[2][3][4][18][19]} The procedure was approved for six months from 1 January 2024 and has been extended repeatedly: to 31 December 2024 by an ITA notice of 1 July 2024, later to 31 August 2026, and, according to a practitioner report of 31 August 2026, to 31 December 2027. We could not open the ITA notices themselves because gov.il blocked automated access; confirm the current validity on the ITA's Form 909 service page before relying on it. ^{[5][15][16][17]}

Separately, the ITA published an updated voluntary disclosure procedure (נוהל גילוי מרצון) on 25 August 2025, as a temporary order valid until 31 August 2026, with a regular track and a "green" track of filing amended or first returns. It is not crypto specific, and its status after 31 August 2026 was not verified. If you have unreported past crypto income, this is a question for a tax lawyer, not a web page. ^[31]

Record keeping

The circular's audit guidance explains why records matter: audits follow documents that show the flow of cash and the holding of the asset, and crypto trading can break the audit trail. Assessing officers are therefore told to demand documents proving that a transaction happened and its size, such as an explanatory letter from the seller describing how the coins were bought and sold, the bank accounts through which funds moved, bank statements for the purchase and sale, and screenshots showing the purchase, the sale and the holding period. ^[1] Form 909 adds the names of exchanges and service providers, the public addresses of the wallets used, evidence for each source of funds and a working paper tracing the coins across the holding period, and banks ask for essentially the same set. ^[4][14]

A practical minimum per transaction: date and time, type (buy, sell, swap, payment, reward, transfer between own wallets), coin and amount, counter asset and amount, the shekel value and the exchange rate source, fees, the platform or wallet, the transaction id, and the lot or cost basis you matched against it. Export CSV histories from every exchange regularly, since some platforms limit how far back you can export, and keep bank statements and KYC correspondence. ^[23] Keep the records for as long as you hold the asset plus the years in which the sale can still be assessed; ask your CPA for the retention period that applies to you.

Guide 9 on this site walks through a record keeping setup step by step and includes a CSV template you can start from: Guide 9: tax records.

Download the CSV template

What is unclear or disputed

The following points have no official ITA answer, or the sources disagree, at the time of writing. Each one belongs on your list for a CPA.

1. Staking, airdrops, lending and DeFi income. No circular or ruling addresses them; practitioners extend the mining rule (ordinary income at receipt) by analogy. ^[1][23]
2. The cost basis method. The ITA expects a consistent method and checks it, but has not mandated FIFO, specific identification or an average. ^[3][23]
3. The 30 day report. The statute is clear, but practice among investors diverges, and there is no published ITA concession for frequent traders. ^[7][22][23]
4. Business versus capital. The ITA has published no crypto specific criteria; classification relies on general case law tests and is decided on the facts. ^[1][23]
5. The 30 percent rate for tokens that represent rights in a company, and the treatment of tokens that are securities, which the bill would exclude from "digital asset". ^[7][8]
6. Losses from hacks, bankrupt exchanges, lost keys, rug pulls and forks: whether and when they are deductible capital losses. No ITA guidance was found.
7. Residency and source. The January 2026 bill proposes that a gain is Israeli source if the seller was resident on the acquisition date, which advisers criticize as a distortion for new immigrants and returning residents; until enacted, the general rules apply. ^[8][25][27]
8. The surtax threshold for 2026 is the 2024 figure carried by a statutory freeze; a 2026 specific ITA table was not located. ^[6][21]
9. The validity of the Form 909 procedure beyond the dates reported by practitioners, and how each bank will apply the amended Directive 411 from 1 May 2027. ^[16][38]
10. Information exchange. The State Comptroller reported in November 2024 that only about 500 crypto reports were filed with the ITA in 2018 to 2022 and that Israel had not yet committed to the OECD crypto asset reporting framework ahead of exchanges expected in 2027. Enforcement intensity may change. ^[29]
11. The pending bills: the digital asset bill of January 2026, and a June 2026 Ministry of Finance draft bill on stablecoins published for public comment. Both are pending and may change. ^[8][30][31]

Practical checklist

1. Decide with a CPA whether your activity is capital or business, and write down the reasoning. ^[1]
2. Record every buy, sell, swap, payment and reward with a shekel value at the time of the event, and choose one cost basis method and stick to it. ^[3][7]
3. After each sale, swap or payment, ask whether a 30 day report and advance is due, and agree a routine with your CPA. ^[7][22]
4. File the annual return (Form 1301) with the capital gains appendix (Form 1399) by the deadline announced for that year; check whether you must file even if you are salaried. ^[7][23][33]
5. Check your total income against the surtax threshold, remembering the extra 2 percent layer on capital source income from 2025. ^[6]
6. Track realized losses and carry forward what you could not use; file a return for the loss year so the carry forward is preserved. ^[7]
7. Before selling, talk to your bank about its crypto policy and the documents it requires, and use licensed providers and accounts in your own name. ^[14][37][38]
8. If a bank refuses the funds, ask your CPA about the Form 909 procedure and its current validity. ^[3][5]
9. Export exchange histories regularly and keep bank statements, KYC correspondence and screenshots; use Guide 9 and the CSV template. ^[1][4]
10. Follow the pending digital asset bill; it may change source rules, definitions and reporting. ^[8]

Sources