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Guide to VAT (Value Added Tax) Refund for Tourists

What is VAT?

VAT - (Value Added Tax) is a tax that all Israeli consumers pay. VAT is a flat rate percentage of each sale / purchase that is included in the price of goods and services, imposed by the state as another source of income.

As of 01/01/2016, the Israeli VAT rate is 17%.

VAT benefits for a tourist

To encourage tourism in Israel, a tourist who purchases goods during his visit in Israel is entitled when he leaves Israel to get a refund of the VAT that he paid for the goods.

He can also get a refund of the VAT that he paid for his hotel stay and car rentals in Israel.

Who is considered a tourist?

A tourist who has a B2, B3 or B4 tourist visa (or is in possession of Form 17 "Entry/Exit Registration" or a tourist declaration form), and is not an Israeli citizen, is entitled to a VAT refund.

An Israeli with dual citizenship (Israeli and foreign), even if he does not reside in Israel for many years, is not entitled to this benefit because he does not qualify for a B2, B3 or B4 visa on his visit to Israel, with the exception of a minor born abroad to Israeli parents until he turns 18 years old.

Conditions for a tourist to get a VAT refund

•  He must have spent a minimum 400 Israeli new shekels on goods in Israel including VAT.

•  The purchase was made at a shop authorized by the Israel Tax Authority and the Ministry of Tourism as a business included in the VAT refund arrangement. (The buyer has to make sure the business was approved in the VAT refund arrangement.)

When buying a product, the tourist must make sure that the details of the product that he purchased and his information were correctly filled in in the tax invoice and the VAT refund document.

•  He must take the goods that he purchased with him when leaving the country.

•  The items that the tourist purchased were for his personal use only and were in non-commercial quantities.

•  The VAT refund does not apply to the purchase of tobacco, food and beverage products, excluding alcohol purchased in wineries or in shops selling products to tourists approved for the VAT tax arrangement by the Ministry of Tourism.

•  When the jewelry and valuables purchased are worth over 20,000 ₪ including VAT, the business must package the jewelry in the company’s original packaging.

 The buyer should not open the bag until it is presented to the jewelry / valuables clerk for a VAT refund.

How to obtain a VAT refund

When you arrive at the airport, you should first go to the VAT refund point at the airport to get your refund before undergoing the security check and checking-in the luggage. You have to show them your passport, tax invoice, and VAT refund invoice.

Make sure that the tax invoice number and the VAT refund invoice should be between the date when you entered and departed Israel. You may be asked to show the items you purchased.

Once the VAT refund is approved, you will get the VAT refund at the VAT refund point which is in the passengers concourse after the border control and just before you leave Israel.

The refund is paid in cash, a check, or by bank transfer (minus a commission).

Please note : Once you are already abroad, a request for a VAT refund will not be honored even if you have the VAT refund authorization form.

What is zero VAT for tourists?

In order to encourage tourism in Israel, certain types of transactions carried out during your stay in Israel are given an immediate exemption from VAT charges, such as a rental car for your personal use, and hotel accommodations during your stay in Israel.

The exemption provided for a tourist staying in Israel, is only for a tourist who received a B2, B3 or B4 visa (as well as those entered Israel by special order or permit, such as diplomats, representatives of foreign countries, etc.).

These are the types of exemptions :

•  A tourist who stays in a hotel, and uses services available at the hotel, including laundry service, use of sauna facilities, use of sports and health facilities, room services and related hotel services.

•  One who rents a private motor vehicle to drive himself around.

•  Domestic flights in Israel.

•  Domestic Israeli cruises (including meals).

•  Domestic tours by car / bus (including meals).

•  Hospitalization in a hospital.

Contact information

"Milgam" company VAT refund tourists services

Customer Service:

Phone: 03-7280123

Fax: 03-7280124

Mail: Vat.info@milgam.co.il
Questions and Answers:
Is a A / 1 student visa considered like a tourist concerning VAT refunds
Answer:
His status is not the same as a tourist’s concerning VAT.
Is a A / 4 companion visa considered like a tourist concerning VAT refunds
Answer:
His status is not the same as a tourist’s concerning VAT.
After handing over the luggage, can I ask for a VAT refund
Answer:
You must go to the VAT refund point at the airport to get the refund.
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