The social media company, Spot.IM is in talks to pay its employees in bitcoin. The firm is currently in negotiations with the Israeli Tax Authority
According to a local news source, Calcalist, the social media company, Spot.IM wants to offer its employees payment in bitcoin. The reason for their proposal being put to the ITA is because any cryptocurrency-based salary would still be liable for taxation in Israel.
Alongside the proposal, Spot.IM has put forward the appropriate exchange rates that would coincide with any payment to employees made in cryptocurrency.
Spot.IM: Complications With A Bitcoin-Based Salary
The complications start with the fact that cryptocurrencies like bitcoin aren’t technically recognized as a currency in Israel. Instead, in February, the ITF designated them an asset as opposed to currency, meaning that those possessing them would be liable for paying capital gains, not income tax.
This fact may de-incentivize the prospect for employees since the capital gains tax ranges from 25-32% while income tax starts at 20%.
According to Spot.IM, to prevent any serious losses due to fluctuations, an average value will be used between bitcoin’s highest and lowest valuations. This number will then be used as an exchange rate that employees can opt into for the entirety or half of their monthly salary.
While employees are reportedly happy about this decision on Spot.IM’s part, Israel still doesn’t recognize cryptocurrencies as a form of legal tender.
Also, in March, the Israel Securities Authority stated that no form of cryptocurrency would be added to the Tel Aviv Stock Exchange for the foreseeable future. It attributed this decision to the volatility of cryptos as an avenue for investment. According to Shmuel Hauser, the authority believes “that the prices of bitcoin behave like bubbles and we don’t want investors to be subject to that volatility and uncertainty.”
Crypto-Salaries Are Becoming International
Spot.IM is not the only company to consider using bitcoin as a method of payment for its employees. GM Internet, a Japan-based company, announced in December 2017 that 4,000 of its employees would be able to take bitcoin instead of a monthly salary as of February 2018.
James is a writer for Crypto Disrupt while also working as a content/news freelancer. He’s a firm believer in the positive impact of blockchain and holds a good amount of trust in Ethereum.