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Israel VAT rate cut to 17% proposal

  • Sep 2, 2015 | Richard Asquith

Israel VAT rate cut to 17% proposal

In an effort to stimulate a flat economy, the Israeli government has proposed a reduction in Value Added Tax to 17%. The indirect tax rate cut, which could boost consumption, would be implemented with a reduction in corporate income tax to 25% from 26.5%.

There is some dispute about the ability of the country to support a tax reduction. The government claims that larger than expect tax revenues warrant the changes; however the Central Bank is less confident.

Israel’s growth slowed in the second quarter of 2015.

Israela’s VAT rate rose from 15.5% to the current 18% between 2010 and 2013. There had been a plan to reduce it back to 17% in 2014.  In April this year, the government backed away from a promised to cut Israeli VAT on foods.

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 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.