Israel VAT rate 18% on invoices: what changed in 2025
The standard rate is 18% from 1 January 2025. Templates that still show 17% need a change.
The standard VAT (Ma'am) rate in Israel is 18% since 1 January 2025. It was 17% before. Most goods and services carry 18%. Exports and services to foreign residents are taxed at 0%, and some supplies, such as residential rental and certain financial services, are exempt. On an invoice, VAT appears as a separate line at the rate that applies.
- Standard rate: 18% from 1 January 2025 (17% before).
- 0%: exports and services to foreign residents, under the VAT Law conditions.
- Exempt: for example residential rental and certain financial services.
- Show VAT as a separate line on the tax invoice.
How it works
Update the default rate in your invoice template to 18% for taxable supplies dated from 1 January 2025.
Decide the treatment of each line: 18%, 0% for qualifying exports, or exempt. Keep the supporting documents for zero-rated sales.
Show the net amount, the VAT amount at its rate and the total. Keep the buyer's and supplier's dealer numbers on the tax invoice.
For older documents, keep the rate that applied on the date of supply. Do not change past invoices to 18%.
Osek Patur dealers do not charge VAT. Osek Murshe dealers charge and report it.
Legal framework
- Value Added Tax Law 5736-1975.
- Israel Tax Authority announcement of 5 December 2024 on the rate of 18% from 1 January 2025.
Frequently asked questions
What is the VAT rate in Israel in 2026?
18%. It has been the standard rate since 1 January 2025. The earlier rate was 17%.
Which invoices should use 18%?
Taxable supplies made from 1 January 2025. Supplies made before that date keep the rate in force at the time.
Are there reduced VAT rates in Israel?
The sources reviewed describe a standard rate, a 0% rate for exports and foreign-resident services, and exemptions for some supplies. They do not list reduced rates such as those in the EU.
Does 4invoices calculate VAT at 18% in Israel?
You set the VAT rate on each invoice line, so you can enter 18%, 0% or another rate. 4invoices does not check which rate applies to your sale and does not file VAT returns with the Israel Tax Authority.