Israeli Tax Authority Investigates NFT Creators for Evasion

03/05/2023 09:01 • Tech Trends • 88 views

On March 5, according to a report from the Israeli tax authorities on Friday, the agency is investigating the tax evasion of two NFT creators. The two are Avraham Cohen and Antony Polak, who are the owners of the Hollyrocknft.com website. According to the tax authorities, the two people sold the NFT created by 3D scanning based on Western Wall stone through the website, but did not truthfully declare the tax.

Israeli tax authorities accused the creator of “Western Wall” NFT of tax evasion, involving more than US $2 million

Analysis based on this information:

In recent times, Non-Fungible Tokens (NFTs) have become a popular item for art collectors and enthusiasts alike. These tokens, which are unique and cannot be replicated, have been selling for millions of dollars. However, as the industry grows, it has attracted the attention of tax authorities, who are now investigating two NFT creators in Israel for tax evasion.

According to a report from the Israeli tax authorities, Avraham Cohen and Antony Polak, two owners of the website Hollyrocknft.com, are under investigation for not truthfully declaring their taxes on NFT sales. The two creators allegedly sold NFTs created by 3D scanning based on Western Wall stone through the website but did not pay taxes accordingly.

The Israeli tax authorities have been keeping a close eye on the growing industry of NFTs, and this is not the first investigation this year. In February 2021, the tax authorities investigated an individual who sold an NFT for $500,000 but failed to declare it as income, resulting in a significant amount of tax evasion.

The investigation of Cohen and Polak signifies an increased focus on the regulation of NFT sales and the collection of taxes related to the transactions. This investigation highlights the importance for NFT creators and sellers to declare their earnings to the appropriate tax authorities.

As the NFT industry continues to grow, it will be interesting to see how tax authorities across the world adapt to the new market. Failure to properly declare taxes on NFT sales could result in significant penalties for creators and sellers; therefore, it is crucial for those involved in this industry to ensure they are compliant with the tax laws of their respective jurisdictions.

Overall, this investigation shows that the tax authorities are taking NFT sales seriously and are willing to pursue those who violate tax laws. With the rise in popularity of NFTs, it is important for creators and sellers to understand the tax implications of their transactions and comply with the law.

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