Tax Authority crypto voluntary disclosure falls flat

Since the publication of the new voluntary disclosure procedure in August 2025, 122 disclosure requests have been submitted to the Israel Tax Authority, with the reported capital amounting to NIS 262 million and the tax due estimated at NIS 19 million, “Globes” has been told. Is this what the Tax Authority expected? The obvious answer is no, but Israel Tax Authority director Shay Aharonovich is in no hurry to write off the procedure.

At a tax conference held this week by the Haifa District Committee of the Israel Bar Association, Aharonovich said that there is still time for the big money from the procedure to come in. “The previous two times that voluntary disclosure procedures were announced, most of the requests were submitted in the last two months,” he explained. Indeed, as part of the voluntary disclosure procedure that was in effect in 2018, about a third of the requests – 34% – were submitted at the very last minute, in December, when the anonymous track expired. Another important statistic recorded at the time was that most of the requests included in the procedure were submitted through the anonymous track.

However, this time, the voluntary disclosure procedure does not include an anonymous track, and apparently the Director of the Tax Authority feels it has not been a resounding success either. Aharonovich admits that there is a lack of response to the procedure that stems from two main problems: the first – the lack of an anonymous track, and the second – the lack of viability for cryptocurrency holders.

“The current data do not impact the state budget,” says Aharonovich. “It does not allow us to waive other taxes. It took a while to issue the procedure because we tried to convince the Ministry of Justice to ease things a bit and we received relief, but the anonymous issue really was not approved and that affects the number of applications.

“In addition, there is the cryptocurrency issue. You have to remember that the procedure was mainly aimed at the cryptocurrency issue and quite a few people contacted me claiming that they are waiting for huge amounts of money from cryptocurrency. The problem is that the Israeli banking system is not willing to accept cryptocurrency, and it is also very difficult to bring in funds as a result of selling cryptocurrency. There is no doubt that this also affects the willingness to make voluntary disclosure, because in the end people do not just want to pay the tax, but to use the money.”

Israel Tax Authority launches new voluntary disclosure plan

The procedure that hasn’t succeeded

Voluntary disclosure procedures allow citizens to reveal the funds and assets they hid “behind virtual, physical and global barriers” and did not pay tax on them, while at the same time receiving criminal immunity. The new track, which is specifically aimed at cryptocurrency investors, does not include an anonymous disclosure track as in the past, but includes a fast “green” track for reporting small amounts, including cryptocurrency profits, without the need for discussions with a tax official.

The procedure, which will be in effect until the end of August 2026, allows traders, individuals, corporate officers and representatives, Israeli and foreign residents, who have committed offenses against tax laws, to conduct a disclosure procedure and pay the taxes legally required, and avoid criminal proceedings.

Even before publication of the new voluntary disclosure procedure, the Tax Authority was busy trying to collect taxes on cryptocurrency profits, among other things in the wake of an audit by the State Comptroller who found that there was an unrealized collection potential of NIS 3 billion in the cryptocurrency market. In December 2023, the Tax Authority published a “bank bypass route procedure” for paying tax on cryptocurrency profits directly to a bank account at the Bank of Israel, if the banks refuse to accept the funds resulting from digital currency profits for tax payment purposes. However, as revealed in “Globes,” this procedure also failed and only a few paid the tax on cryptocurrency profits through the designated account.

Aharonovich recounted, “It didn’t work. No one expected only four cases to use this procedure. If the banking system does not open its doors more liberally to accept cryptocurrency and the funds from the sale of cryptocurrency, this will have a direct impact on voluntary disclosure and the payment of taxes on cryptocurrency profits.”

He added, “In the end it comes back to a person saying to himself: ‘I have money in cryptocurrency or money held abroad and I want to use it in Israel, so if I can’t transfer it to an account in Israel, why pay the taxes on it?’ This is not an excuse because taxes have to be paid legally, even if the money is abroad or in cryptocurrency, but we understand how people think.”

To persuade the banks

Aharonovich explains that the Tax Authority is striving to soften the banks’ stance on cryptocurrency. He says, “We tried and we are still trying, both with the Bank of Israel, the Ministry of Justice and the Money Laundering Prohibition Authority, but ultimately the banks are independent, and it’s good that they are. They have compliance rules and compliance officers. There is now a team that sits together with the Ministry of Justice and the Bank of Israel and our representatives with the banks, and we are trying to see with them and with the Money Laundering Prohibition Authority how we can somehow crack this thing in a certain way – that is, make the banks be more liberal in accepting these funds.”

Ahranovich adds, “I plan to get into this personally, more intensively in the next two to three months, to see if we can try to influence the banking system. There is no doubt that if this happens, then there will be a much greater flow of voluntary disclosure.”

The Tax Authority is trying to persuade banks to take an approach similar to that used in the US, where the rules for introducing cryptocurrency money into the banking system are less strict. In addition, the Tax Authority director revealed that the Authority plans to open a bank account in the US to allow the payment of tax on cryptocurrency profits. “We are currently in such a process in the US. If the Americans are more lenient in procedures than banks in Israel, it may be possible to transfer the funds there.

“We are examining other channels. This is part of the things on our agenda in 2026 – cryptocurrency and voluntary disclosure – and we will try to see how we can solve it. In the coming months, we will try to see how we can loosen this cork a little and maybe also extend the voluntary disclosure a little if we need to and it looks like that we are getting some kind of results.”

Published by Globes, Israel business news – en.globes.co.il – on January 22, 2026.

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