The Customs and Value Added Tax (VAT) division of the Israeli Ministry of Finance has refused to open a VAT record for Buy Accountless Ltd., owned by CPA and jurist Roey Gorodish, because its business operations are based exclusively on bitcoin, in a way that relieves the company from the need to hold an ordinary bank account.
According to the Customs and VAT division, when a person applies to register his or her company as a "dealer" and open a VAT record pursuant to the Value Added Tax Law, they must submit the company's bank account information. Absent a company bank account, the applicant cannot open a VAT record. Moreover, the Israeli Tax Authority asserts that even a PayPal account does not suffice for this purpose, because it does not satisfy the requirements prescribed by law.
Buy Accountless operates similarly to a group purchasing organization for payment clearance services. It brings together buyers and sellers, allowing them to avoid transacting through the conventional banking system. The company argues that the Tax Authority's refusal is unlawful and has filed a complaint with the Ombudsman and the Attorney General. In the meantime, the company cannot issue tax invoices to its customers and is therefore experiencing delays in collecting the fees it charges.