An Israeli voluntary disclosure program for cryptocurrency tax corrections has fallen significantly short of expectations, collecting reports on only $50 million in capital gains against anticipated revenues near $1 billion. The program, offering criminal immunity for holdings under $522,000, has seen limited participation, with only 58 filers so far. A Bank of Israel report indicates Israelis hold roughly $1 billion in crypto assets, suggesting substantial underreporting.
A voluntary disclosure policy for cryptocurrency taxes in Israel has yielded disappointing results. Authorities had expected to gain up to $1 billion in taxes from the program but have so far received reports of only $50 million in combined crypto capital gains.
The policy, announced in August 2025, grants immunity from criminal charges. It applies if holdings did not exceed $522,000 as of December 2024 and if correct reports are filed and taxes paid by August 2026.
Only 58 filers have attempted to correct their taxes using the procedure. Globes reported that potential underreported holdings could total billions of dollars.
A tax expert cited the lack of anonymity in the initial stage as a key issue. “When the risk assessment of some taxpayers is not high, and the procedure itself does not offer certainty or anonymity in the first stage, the incentive to undergo voluntary disclosure is weakened,” said Iftach Simhony, a CPA.
According to the Bank of Israel’s report for early 2024, Israelis held about $1 billion worth of crypto assets. This figure highlights the scale of the reported shortfall.
Separately, U.S. lawmakers are seeking changes to crypto tax reporting. A group introduced legislation in May called the PARITY Act that would direct the IRS to review creating a de minimis exemption.
The proposed law would prevent the IRS from forcing taxpayers to report small crypto transactions. This move aims to simplify tax compliance for digital asset users.
