Key Takeaways:
In August 2025, the Israel Tax Authority cut anonymity rules, causing crypto disclosures to drop to just 58.The policy shift left Israel with $14 million in revenue, missing a $700 million market collection goal.Taxpayers face a steep compliance hurdle before the current voluntary disclosure track closes on Aug. 31, 2026.Iftach Simhony, a lawyer, certified public accountant, and partner and head of the tax department at Prof. Bein Law Office, said the change fundamentally altered the incentives.
“The cancellation of the anonymous track not only deterred taxpayers, it changed the balance of power in the process,” Simhony said. “Everything is exposed to the Tax Authority, and there is no real ability to negotiate. The taxpayer is required to enter the process before knowing what the actual exposure will be, and therefore many prefer to stay out.”
Simhony added that the impact is even more pronounced in digital assets, where taxpayers often have complex transaction histories and uncertain tax liabilities.
“When the procedure itself does not offer certainty or anonymity in the first stage, the incentive to undergo voluntary disclosure is weakened.”
Israel’s previous voluntary disclosure rounds in 2011-12, 2014-16, and 2017-19 collectively handled about 9,000 cases and generated $1.74 billion in tax revenue. By comparison, the current program is on pace to be the least effective to date.
