Israeli duo found guilty of large NFT tax evasion scheme worth $2.2M

Israeli tax authorities in Jerusalem are investigating two NFT creators for possible tax evasion.

Suspects, Abraham Cohen from Jerusalem and Anthony Pollack from Hal Adder, are said to have reported unreported income of about $8 million. Israeli new sheqel (NIS) From selling NFTs based on 3D scans of the Wailing Wall, Around jerusalem post.

The suspect was selling NFTs through his website, holirocknft.com. According to the investigation, the suspect has sold 1,700 titles since 2021 and earned 620 Ethereum. This is equivalent to approximately 8 million NIS at the time of the transaction. However, the suspect did not report these earnings as business earnings.

The suspect was released under restricted conditions, including handing over a digital wallet containing Ethereum. An investigation is ongoing and the suspect awaits further legal proceedings. jerusalem post report.

NFTs, Cryptocurrencies and Taxes in Israel

• Capital gains in Israel are taxed at 25%.
• However, if it is considered a business expense, the tax rate will be up to 53%.
• Once the cryptocurrency is converted to traditional currency, the difference between the amounts (paid and purchased) is used for tax purposes.

This is not the first time NFT creators have been investigated for tax evasion in Israel. Under the brand name WUWA he creates and sells his NFT art on the Opensea International platform Graphics from Tel Aviv His designer, Ben Benhorin, recently arrested This is because he failed to report a total income of approximately 3 million NIS from his sales. The suspect also did not report conversions of his 30 Ethereum-type digital currencies received as payments.

During the investigation, it was discovered that the suspect did not report income from sales on the platform in his annual report to the tax authorities for 2021. The suspects allegedly converted some of the cryptocurrencies received from the sale of NFTs into other currencies. He was using the Uniswap platform which he did not report to tax authorities. Such activity is considered a taxable sale.