Israeli lawmakers have proposed a bill that would exempt foreign residents from capital gains taxes on the sale of digital currencies. The bill, which passed a preliminary reading in the Knesset, Israel's parliament, on Wednesday, would also reduce the tax on crypto options for employees from 50% to 25%.

The bill is supported by the coalition government led by Prime Minister Benjamin Netanyahu, who has made attracting foreign investment a key goal of his economic policies. Netanyahu has said that the bill would "balance the situation and eliminate the discrimination in taxation" between foreign investors in the crypto sector and those in the traditional high-tech industry.

The bill has been welcomed by the Israel Crypto, Blockchain and Web3 Companies Forum (ICBW3), a trade association representing the country's crypto industry. "This is a major step forward for the Israeli crypto ecosystem," said ICBW3 CEO Aviram Tamir. "It will make Israel even more attractive to foreign investors and help us to become a global leader in the crypto industry."

The bill is not without its critics. Some argue that it would give foreign investors an unfair advantage over Israeli investors. Others worry that it could encourage tax avoidance and evasion. However, the bill's supporters argue that it is necessary to attract foreign investment and to help Israel to stay ahead of the curve in the rapidly evolving crypto industry.

The bill is still in its early stages and it is not yet clear when it will be voted on by the Knesset. However, its passage would be a major victory for the Israeli crypto industry and a sign that the country is committed to becoming a global hub for crypto innovation.

In addition to the tax benefits, Israel has also taken a number of other steps to make itself a welcoming environment for the crypto industry. In 2017, the Israeli Securities Authority (ISA) issued a regulatory framework for digital currencies, which clarified the legal status of crypto assets and established a licensing regime for crypto exchanges. The ISA has also been working on developing a sandbox environment for crypto startups, which would allow them to test their products and services in a regulated setting.

As a result of these efforts, Israel has become one of the most crypto-friendly countries in the world. It is home to a number of leading crypto companies, including Bitmain, 8BTC, and Coinmama. The country also hosts a number of major crypto conferences and events, such as the annual Consensus conference.

The passage of the proposed bill would further solidify Israel's position as a global leader in the crypto industry. It would make the country even more attractive to foreign investors and startups, and it would help to boost the local economy. If the bill is passed, it would be a major victory for the Israeli crypto community and a sign that the country is committed to embracing the future of finance.

Here are some additional details about how crypto is taxed in Israel:

• Capital gains in Israel are taxed at 25 percent.
• The taxpayer needs to provide records on their tax return to support their claims of gains or losses.
• If the nature of business with the crypto is to be classified as a business expense, the tax rate will be much higher, up to 53 percent.
• Corporate capital gains are taxed at a rate of 23%.