On February 19, 2018, in a final circular released by the Israeli Tax Authority, it was announced that cryptocurrencies will continue to be regarded as a property.
The circular clarifies positions of both the Tax Authority and the Israel Securities Authority. When calculating income tax, if the cryptocurrency is considered an "asset" and "does not reach a business," then only capital gains tax applies. The capital gains tax is between 20 and 25 percent. Cryptocurrencies used to pay for goods and services will be taxed as "any business activity."
Per the circular, when calculating value-added tax, or VAT liability, cryptocurrency is considered an "intangible asset" that is solely for the purposes of investment. Thus, there will be no VAT liability. However, individuals trading cryptocurrencies through business channels must pay a VAT of 17 percent on top of the capital; the same goes for miners.
Sources were translated from Hebrew using Google Translate.