Israel VAT Rate 2026: 18% Standard Rate

How Much Is VAT in Israel?

The standard VAT rate in Israel is 18% in 2026. Other rates: 0% — Exports of goods and certain services, fresh fruit and vegetables, hotel accommodation for foreign tourists, most supplies in Eilat. Locally the tax is called Mas Erech Musaf (Ma'am). Standard VAT/GST rates worldwide range from around 5% to 27%.

How to calculate Israel VAT

To add 18% VAT to a net (tax-exclusive) price, multiply it by 1.18. To remove VAT from a gross (tax-inclusive) price, divide it by 1.18.

• Add VAT: ILS 100 net × 1.18 = ILS 118 gross (that is ILS 18 of VAT)
• Remove VAT: ILS 118 gross ÷ 1.18 = ILS 100 net (that is ILS 18 of VAT)

Use the Israel VAT calculator above for any amount, or compare Israel with every other country in our VAT rates by country table.

Current VAT Rates (2026)

Key VAT milestones

• 2026: Invoice allocation number threshold cut to ILS 10,000 in January and ILS 5,000 in June
• 2025: Standard rate raised from 17% to 18% on 1 January
• 2015: Standard rate cut from 18% to 17%
• 2013: Standard rate raised to 18%
• 1976: VAT introduced

Is the VAT rate the same everywhere in Israel?

The 18% rate applies nationwide except in Eilat, where most local supplies of goods and services are VAT-free under its free trade zone status.

Good to know

Israel has a single VAT rate of 18% and no reduced rates; relief is given through zero-rating, notably for fresh fruit and vegetables and for tourist hotel stays.

Israel is phasing in a clearance-style e-invoicing model: buyers can only deduct input VAT on larger B2B invoices that carry an allocation number from the Tax Authority, with the threshold falling to ILS 5,000 from June 2026.

Zero-rated supplies (0%)

VAT is charged at 0%, but the seller can still recover input VAT on related costs:

• Exports of goods
• Certain services supplied to foreign residents
• Fresh unprocessed fruit and vegetables
• Hotel accommodation and some services for foreign tourists
• Supplies within the Eilat free trade zone

VAT-exempt supplies

No VAT is charged, and the seller generally cannot recover input VAT on related costs:

• Residential letting
• Financial institutions (pay a separate VAT-equivalent tax on payroll and profits)
• Non-profit organisations (pay a wage tax instead)
• Sales by small exempt dealers (Osek Patur)

Thresholds, deadlines and e-invoicing rules are revised regularly. Always confirm current requirements with Israel Tax Authority before relying on them.

Cross-border rules

Digital services and e-commerce: Israel has proposed a registration regime for foreign providers of B2C digital services, but its implementation status is unclear; check with the Israel Tax Authority.

Tourist VAT refunds: Tourists can reclaim VAT at departure on goods bought from participating stores when a single invoice exceeds ILS 400 including VAT.

For the general rules, see the reverse charge mechanism, VAT on digital services, VAT invoice requirements and VAT refunds for tourists and businesses.

Nearby Countries

What is the current VAT rate in Israel?

The standard VAT rate in Israel is 18% in 2026. Other rates in force: 0% (zero rate). See the rates table above for exactly what each rate covers.

How do I calculate VAT in Israel?

To add 18% VAT, multiply the net price by 1.18. To remove it from a VAT-inclusive price, divide by 1.18; the difference is the VAT. The calculator at the top of this page does both.

Is there VAT in Eilat?

Most local purchases of goods and services in Eilat are exempt from VAT because the city is a free trade zone. Goods taken from Eilat to the rest of Israel are subject to VAT.

Can tourists get a VAT refund in Israel?

Yes. Tourists can reclaim VAT on goods bought from participating stores when a single invoice exceeds ILS 400 including VAT, at refund counters such as Ben Gurion Airport.

Who needs to register for VAT in Israel?

Registration threshold: Businesses register as a licensed dealer (Osek Murshe); those below the annually indexed small-dealer ceiling (about ILS 120,000) can be an exempt dealer (Osek Patur). Foreign businesses: Foreign businesses supplying goods or services in Israel generally must register through a local representative; B2B imported services are self-assessed by Israeli customers.

Where these figures come from

• PwC Worldwide Tax Summaries - Israel, Other taxes
• GOV.IL - VAT refund guide for tourists
• Israel Airports Authority - VAT refund at Ben Gurion
• vatcalc - Israel raises VAT thresholds 2025