VAT Basics

Value Added Tax (VAT, or מע"מ) is charged on most goods and services in Israel at the standard rate of 17%. This section explains how VAT works, who must charge it, the difference between a licensed dealer (עוסק מורשה) and exempt dealer (עוסק פטור), and how input VAT offsets output VAT.

  1. What is VAT and how does it work?

    Explanation of value added tax in Israel

  2. Authorized dealer versus exempt dealer

    The differences between the types of traders for VAT purposes

  3. Tax invoice and transaction invoice

    Types of invoices and issuance obligation

  4. Input VAT - VAT deduction on expenses

    How to deduct VAT paid on business expenses

  5. Zero rate transactions

    Transactions subject to VAT at a rate of 0%