Are you used to ordering products over the Internet?
Products purchased on the Internet in Israel are subject to Israeli import laws. In accordance with Israeli law, the importation of products from abroad, with a value of less than 75$ (shipping and insurance excluded), is fully tax exempt.
It is important to note that this exemption does not apply to imports of the following products:
It's also important to note that you'll be exempt from customs duties on imports up to a value of 500$.
That's why when you import a product valued between 75$ and 500$, you'll have to pay VAT - Maam (17%), but you won't have to pay customs duties.
2 parcels sent by the same seller to the same final consumer within 72 hours will be considered as one and the same parcel, and import taxes will be calculated according to the total value of the 2 parcels.
As you can see, it's best to wait a week before placing a new order on your favorite website.
Another little clarification: regarding delivery charges, if they are collected by the seller, they are included in the 75$ calculation. The exemption of these charges is only valid if you pay them directly to the delivery company (Fedex, Chrono 24 etc...).
Why are we taxed on the purchases we make on the Internet?
We're already paying enough for the product, you might say, and I'm not talking here about the excessive delivery charges sometimes levied by certain websites.
The answer to this question is actually quite simple: the Israeli government wants to encourage consumption in local shops, and wants to prevent your money from leaving the country.
By imposing high taxes on imported goods, the government discourages some consumers from shopping abroad, and thus favors local entrepreneurs.
See also: Guide to doing business in Israel
Here are a few examples to help you understand this tax: Example 1:
You've decided to buy 65$ worth of clothes on the Internet.
The delivery charge is 20$. This gives a total payable of 85$.
Even if you have exceeded the 75$ amount, you will still be exempt from tax on this purchase, since the value of the good does not exceed 75$.
You've decided to buy a toaster on the Internet, worth 275$.
Delivery costs are 37$. This gives a total payable of 312$.
For this purchase, you'll have to pay VAT (17%), but you'll be exempt from customs duties.
You've decided to buy a Smartphone on the Internet, worth 450$ (including delivery).
On this purchase, you will have to pay VAT (17%), but also an acquisition tax (מס קניה - Mas Kniya), as cell phones are included on the list of goods subject to acquisition tax, just like televisions, for example, or car accessories.
The amount of the acquisition tax depends on each type of purchase, and is calculated according to the amount of goods purchased on the Internet in Israel.
Click here to consult the list of items subject to acquisition tax (in Hebrew). Example 4:
You've decided to buy a flat-screen TV over the Internet, worth 810$ (including delivery).
On this purchase, you will have to pay VAT (17%), acquisition tax (מס קניה - Mas Kniya), and also customs fees...