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Israel digital VAT update

  • Apr 13, 2016 | Richard Asquith

Israel digital VAT update

Israel is continuing with proposals to levy 16% VAT on supplies of digital services to Israeli consumers by foreign providers.

The tax authorities issued a new Circular this week outlining plans to make supplies by foreign companies of goods and services via e-commerce taxable.  The Circular makes reference to the Base Erosion Profit Shifting (BEPS) Action Point 1, highlighting that no physical presence is required to trigger a taxable event.

A separate draft Circular had been issued at the start of April for public discussion. This covered the VAT issues for non-resident e-service providers with substantial business interests in Israel.

The proposal to change the existing VAT legislation is being reviewed by the Knesset, the Israeli parliament.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He can be contacted at: He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.