Use this Israel VAT Calculator to easily calculate Value Added Tax (Ma’am) on goods and services. Whether you’re including or excluding VAT, this tool helps you quickly determine the correct tax amount based on Israel’s standard VAT rate of 17%.

Israel VAT Calculator

Amount (ILS): VAT Rate (%):

Results

VAT Amount: 0.00 ILS

Total Amount: 0.00 ILS

How to Use the Israel VAT Calculator

With this simple tool you can quickly add or remove VAT from any amount in Israeli Shekels (ILS). Just follow the steps below:

Enter your base amount Type the net price (before VAT) or the gross price (including VAT) into the Amount (ILS) field.
Confirm or adjust the VAT rate By default it’s set to 17%. If you need a different rate, simply overwrite the VAT Rate (%) field.
Choose your action
• Click Add VAT to calculate the VAT amount on top of the base price.
• Click Remove VAT to extract the VAT portion from a VAT-inclusive total.
Read your results
• VAT Amount shows how much VAT was added or removed.
• Total Amount shows your final price (net + VAT) or the net price (gross – VAT).

Example Usage

Suppose you have an invoice total of 1170 ILS, which already includes 17% VAT:

Enter 1170 in “Amount (ILS)”.
Keep the VAT Rate at 17.
Click Remove VAT.
You’ll get:

VAT Amount: 170.17 ILS
Total Amount: 999.83 ILS (the net price before VAT)

Or if you start with a net price of 1000 ILS and want to know the total:

Enter 1000 in “Amount (ILS)”.
Click Add VAT.
You’ll see:

VAT Amount: 170.00 ILS
Total Amount: 1170.00 ILS (net + VAT)

That’s it! This calculator handles the math for you—no formulas needed. If you ever forget the VAT rate, just adjust the VAT Rate (%) field before clicking your action.

VAT System in Israel: Everything You Need to Know

The Value Added Tax (VAT) system in Israel is a central component of the country’s indirect taxation policy. It applies to nearly all goods and services sold within the country, as well as to certain imports. Businesses operating in Israel must understand how VAT works to remain compliant and avoid costly penalties.

Overview of Israel’s VAT System

Israel introduced VAT in 1976, and it has since become a primary source of government revenue. VAT is governed by the Israeli VAT Law and is administered by the Israel Tax Authority.

Standard VAT Rate in Israel: 17% (as of 2024)

The VAT system operates on a self-assessment basis, meaning businesses calculate, report, and pay VAT themselves via periodic returns.

Who Is Required to Register for VAT in Israel?

All businesses with taxable turnover above a certain threshold must register with the Israel Tax Authority and obtain a VAT registration number. This applies to:

Retailers and wholesalers
Service providers
Freelancers and professionals
Online sellers targeting the Israeli market

Even businesses operating below the threshold may voluntarily register if they want to reclaim input VAT on expenses.

How VAT Works in Israel

Israel’s VAT system is similar to the model used in Europe and other OECD countries. Here’s how it works:

Input VAT: VAT paid on business purchases and expenses.
Output VAT: VAT charged to customers on sales.
VAT Payable: Output VAT – Input VAT = amount owed to (or reclaimed from) the tax authority.

Exemptions and Zero-Rated Supplies

While most goods and services are subject to the 17% VAT rate, some are exempt or zero-rated:

Zero-Rated Items

Exports of goods
Certain services rendered to foreign clients
International transportation

Exempt Goods and Services

Financial services
Rent from residential property
Educational institutions
Certain nonprofit activities

VAT Returns and Filing Deadlines

Businesses in Israel must file VAT returns either monthly or bimonthly depending on their size. Returns must be submitted online, and any VAT payable must be paid by the deadline.

Monthly filing: Required for large businesses.
Bimonthly filing: Allowed for small and medium-sized businesses.

Invoicing and Documentation

All VAT-registered businesses must issue tax invoices that include the following:

VAT registration number
Total amount charged (including VAT)
Breakdown of VAT amount
Date of transaction
Customer details (for B2B transactions)

Proper bookkeeping is required to support VAT claims and defend against audits.

Digital and E-commerce Considerations

Israel has been actively updating its VAT rules to cover cross-border digital services and e-commerce transactions. If a foreign business provides digital services (like streaming, software, or apps) to Israeli customers, it may be required to register and remit VAT.

Penalties for Non-Compliance

The Israeli Tax Authority imposes strict penalties for late or incorrect VAT filings:

Late payment interest
Fines for failing to register or submit returns
Criminal prosecution for intentional fraud

How to Calculate VAT in Israel

To calculate the VAT included in a price or add VAT to a net amount, use the formula:

To add VAT: Net price × 1.17 = Gross price
To extract VAT: Gross price ÷ 1.17 × 0.17 = VAT amount

You can use this Israel VAT Calculator for accurate and fast results.

FAQs

What is the current VAT rate in Israel?

As of 2024, the standard VAT rate is 17%.

Can foreign businesses be required to register for VAT?

Yes. Especially if they sell digital goods or services to Israeli customers.

What’s the difference between exempt and zero-rated VAT?

Zero-rated goods/services are taxed at 0% but allow reclaiming input VAT. Exempt items do not allow VAT recovery.

How often do I need to file returns?

Monthly or bimonthly, depending on your business size and turnover.

Conclusion

The VAT system in Israel is well-structured and enforced, with a standard rate of 17% and specific exemptions for targeted sectors. If you’re doing business in Israel—whether local or foreign—understanding your VAT obligations is essential. Regular compliance, accurate invoicing, and proper filing are all necessary to maintain good standing with the Israeli Tax Authority.

For automated calculations, use the Israel VAT Calculator to ensure your numbers are accurate every time.

Frequently Asked Questions (FAQs) – Israel VAT

1. What is the current VAT rate in Israel?

The standard VAT rate in Israel is 17%.

2. Is VAT called something different in Israel?

Yes, VAT is known as “Ma’am” (מס ערך מוסף) in Hebrew, which translates to Value Added Tax.

3. Who is required to register for VAT in Israel?

Any business exceeding a certain annual turnover threshold must register for VAT with the Israeli Tax Authority.

4. Are there any reduced VAT rates in Israel?

No, Israel primarily applies a flat VAT rate of 17%. However, certain transactions may be exempt.

5. Are exports subject to VAT?

Exports from Israel are typically zero-rated, meaning they are taxable but at a 0% VAT rate.

6. Do tourists pay VAT in Israel?

Yes, but tourists can claim VAT refunds on specific purchases made from authorized shops.

7. What goods or services are VAT exempt in Israel?

Common exemptions include financial services, residential rents, and certain education and cultural services.

8. How is VAT calculated in Israel?

VAT is calculated as 17% of the net price of goods or services. You can use a calculator to include or exclude VAT.

9. How often must businesses file VAT returns?

Most businesses must file VAT returns monthly or bimonthly, depending on their revenue.

10. What happens if I don’t pay VAT on time?

Late payment of VAT may result in penalties, interest, and legal action by the Israeli Tax Authority.

11. Can I reclaim VAT paid on business expenses?

Yes, registered businesses can generally reclaim VAT on inputs used for taxable activities.

12. How is VAT handled for online services?

Foreign digital service providers must charge and remit VAT if providing services to Israeli consumers.

13. Is VAT applicable on property sales?

Yes, commercial property sales are subject to VAT, but private residential sales are often exempt.

14. Are non-profits required to register for VAT?

Some non-profits may be exempt, while others must register depending on the nature of their activities and revenue.

15. Where can I find official VAT guidelines for Israel?

You can visit the [Israel Tax Authority’s official website](https://tax.gov.il) for up-to-date information and guidelines.

Browse Other Calculators:

Israel Vat Calculator