Israel raises VAT rate 1% to 17% on 1 September 2012

The Israeli Parliament has agreed to increase the standard VAT rate from 16% to 17%.  The new rate will be effective from 1 September 2012.

This increase follows a rise three years ago from 15.5% to 16%.  At the time, this increase was only intended to be temporary.  However, the decline in export markets, especially the key Euro zone, meant this reversal was put off at the start of 2011.

In addition to the new VAT rise, there will also be an increases in individual income tax and a new top rate corporation tax rate.