Israel VAT is 18% since 2025 (17% before)
The standard rate rose from 17% to 18% on 1 January 2025. Guides and templates that still say 17% are out of date.
The standard VAT (Ma'am) rate in Israel is 18% since 1 January 2025. From 1 June 2013 it was 17%, and before that 16%. Many older guides, templates and price lists still show 17%. Exports of goods and services to foreign residents are taxed at 0% under the conditions of the VAT Law, and some supplies, such as residential rental, are exempt. Dealers are either Osek Murshe (registered, charges and reports VAT) or Osek Patur (exempt, does not charge VAT). The turnover ceiling for Osek Patur is set by the authorities and updated from time to time, so check the current figure on the ITA site.
- Standard rate: 18% from 1 January 2025.
- Earlier: 17% (from June 2013), 16% before that.
- 0%: exports and services to foreign residents, under the VAT Law conditions.
- Osek Patur does not charge VAT; check the current turnover ceiling on the ITA site.
How it works
Update the default rate in your invoice template to 18% for supplies made from 1 January 2025.
Decide the treatment per line: 18%, 0% for qualifying exports, or exempt. Keep the supporting documents for zero-rated sales.
Keep the rate that applied on the date of supply for older documents. Do not restate past invoices at 18%.
Choose your status with the ITA or your accountant: Osek Murshe charges VAT and files returns, Osek Patur does not charge VAT.
Confirm current rules, ceilings and filing deadlines on the Israel Tax Authority website.
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
Is Israel's VAT rate 17% or 18%?
18% since 1 January 2025. It was 17% from June 2013 until the end of 2024, which is why many older sources still say 17%.
Which invoices use 18%?
Taxable supplies made from 1 January 2025. Supplies made earlier keep the rate in force at the time.
What is the Osek Patur turnover ceiling?
It is set by the tax authorities and updated over time. This page does not give a figure; check the current ceiling on the ITA website or with your accountant.
Are there reduced VAT rates in Israel?
The sources reviewed describe the standard rate, a 0% rate for exports and foreign-resident services, and exemptions for some supplies. They do not list reduced rates like those in the EU.
Does 4invoices calculate Israeli VAT or file returns?
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. Try it free for 6 months, no card needed.