Israel’s Crypto Tax Amnesty Falls Short, Only $50M Reported

The Israel Tax Authority (ITA) is reportedly facing disappointing results from its voluntary crypto tax disclosure program. Despite expectations of up to $1 billion in reported gains, only $50 million has been disclosed as of June 2026, according to Globes. With the August 31 deadline looming, the program’s lackluster participation underscores ongoing challenges in crypto tax compliance.

The ITA launched the initiative in August 2025, offering immunity from criminal charges for taxpayers who disclosed unreported digital asset income, provided their holdings didn’t exceed NIS 1.5 million (around $522,000 at the time) as of December 31, 2024. However, only 58 filers have reportedly taken advantage of the program so far, a fraction of the estimated 200,000 Israelis engaging with cryptocurrencies.

Iftach Simhony, CPA and head of the tax department at the Prof. Bein Law Office, pointed to a lack of anonymity as a key deterrent. “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,” he told Globes.

Broader Context: Israel’s Crypto Tax Landscape

Israel has been tightening its approach to crypto regulation in recent years. Cryptocurrencies are classified as property, subjecting transactions to capital gains tax. Yet compliance has historically been low. Between 2018 and 2022, only about 500 taxpayers per year reported crypto activity, according to a 2024 State Comptroller report, despite an estimated 200,000 active users in the country.

In 2023, the ITA adopted the OECD’s Crypto-Asset Reporting Framework (CARF), enabling global exchange of information on crypto holdings. The current voluntary disclosure program represents an attempt to close the compliance gap by encouraging taxpayers to come forward without fear of legal repercussions. However, even with these measures, the program appears to be falling short of its goals.

Why It Matters

According to the Bank of Israel, Israelis held approximately $1 billion in crypto assets as of mid-2024, highlighting the scale of potential underreporting. The ITA’s inability to attract voluntary disclosures at expected levels raises questions about its enforcement capacity and the effectiveness of its outreach strategies.

This also comes at a time when Israel’s crypto ecosystem is evolving rapidly. In April 2026, the country approved its first regulated stablecoin, signaling a willingness to integrate digital assets into the financial system. Yet the lack of robust tax compliance could undermine these regulatory advances by perpetuating a perception that crypto remains a vehicle for tax evasion.

Outlook

With less than three months until the program’s deadline, the ITA faces an uphill battle to boost participation. Analysts suggest that offering greater incentives, such as enhanced anonymity or reduced penalties, could be crucial to drawing in more filers. Meanwhile, traders and investors operating in Israel should be aware that regulatory scrutiny is likely to intensify, especially after the voluntary disclosure window closes.

For now, the ITA’s struggle to achieve compliance highlights the broader challenges governments face in adapting tax enforcement to the decentralized and pseudonymous nature of cryptocurrency markets.

Image source: Shutterstock