Israel Tax Authority Says Voluntary Crypto Disclosure Program Falls Short of Expectations

Israel’s Tax Authority says its voluntary disclosure program for cryptocurrency profits has fallen short of expectations, even though the policy grants immunity from criminal prosecution to individuals who correct their reports.

“Summary - Israel's crypto voluntary disclosure program has produced only about $50 million in reported income, far below its original $1 billion tax revenue target”

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Globes reported that Israeli officials expected up to $1 billion in tax revenue under an August 2025 voluntary disclosure policy effective until August 2025, but disclosures to date cover only about $50 million in crypto capital.

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The same reporting says only 58 individuals have attempted to amend their tax returns using the procedure, leaving the authority with a small share of the revenue it expected.

A Bank of Israel financial stability report for January to June 2024 is cited as showing citizens hold approximately $1 billion in crypto assets, providing context for the gap between expected and reported figures.

The program’s eligibility is described as requiring that the value of a taxpayer’s crypto holdings did not exceed the equivalent of $522,000 as of December 2024, with taxes paid before Aug. 31, 2026.

A central issue in the reporting is that the voluntary disclosure process does not include an anonymous track at the first stage, which a tax expert says weakens incentives to come forward.

Iftach Simhony, a CPA and head of the tax department at the Prof. Bein Law Office, told Globes that "the difficulty of the absence of an anonymous track is even more acute."

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Simhony also said that when "the procedure itself does not offer certainty or anonymity in the first stage, the incentive to undergo voluntary disclosure is weakened," framing the problem as exposure before taxpayers receive clarity.

Globes further reports that the program’s structure includes a fast "green" track for reporting small amounts, including cryptocurrency profits, without the need for discussions with an assessment officer.

Globes adds that the voluntary disclosure procedure published in August last year and scheduled to end on August 31 2026 does not include an anonymous disclosure track as in the past.

The reporting places the underperformance of Israel’s crypto disclosure effort alongside broader scrutiny of crypto enforcement, including references to criticism from the State Comptroller about unrealized collection potential in the crypto market.

“Israeli tax authorities have received far fewer crypto tax corrections than expected under a voluntary disclosure program that offers criminal immunity to eligible taxpayers”

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Globes says the State Comptroller found an unrealized collection potential of NIS 3 billion in the crypto market, and it describes the voluntary disclosure procedure as set to fail with only 58 requests and reported capital estimated at NIS 145.8 million.

The same Globes reporting says the procedure is the third voluntary disclosure procedure after earlier frameworks in 2011-2012, 2014-2016, and 2017-2019, and it notes that those earlier efforts handled about 9,000 cases and collected some NIS 5 billion in tax.

Outside Israel, the PARITY Act is described as a US legislative effort introduced in May that would direct the IRS to review creating a de minimis exemption for digital assets, so taxpayers would not be forced to report certain small crypto transactions.

In the US context, the reporting frames the policy debate as balancing tax enforcement against the practical burden of reporting routine digital asset payments.