The Israeli VAT Law for German companies
Common questions and answer regarding VAT liability in Israel, for German companies.
In the last two decades, we provide VAT solutions to many German companies with business activities in Israel. Usually, the first questions concern VAT liability in Israel.
We have gathered the frequently asked questions and answers from our customers:
I have a VAT obligation in Israel, how do I issue Israeli tax invoice in Israel?
According to the Israeli law, in order to issue Israeli tax invoice due to VAT liability, an Israel VAT file must be opened after the company receives a VAT tax number.
The Israeli tax invoice must include the name of the company and the VAT tax number in Israel, along with the amount in NIS and transaction details in Hebrew.
We are an international company that provides customer service in Israel through Israeli employees. Is there a VAT liability?
Yes, there is VAT liability. According to the Israeli VAT law section 15(2), service will be considered as a service in Israel, if it was rendered to an Israel resident.
My international company provides consulting services regarding massive machine that assist in infrastructure project such as roads, tunnels, wind farms or solar power plants in Israel. Is there a VAT liability?
Yes, there is VAT liability. According to the Israeli VAT law section 15(3), a service will be considered as a service in Israel, if it was rendered relation to assets located in Israel.
I sell equipment and provide service in Israel, Is there a VAT liability?
Yes, there is VAT liability. According to the Israeli VAT law section 16(1-2), to obligation in respect of a sale, is on the seller. The obligation in respect of a service, is on the service provider.
My international company imports goods to Israel. Do I have a VAT liability?
In General, yes. According to the Israel VAT law section 2, VAT shall be imposed on the importation of goods.
I am a non-Israeli resident with business activity in Israel. Do I need an Israeli fiscal representative?
Yes, there is a need for fiscal representative. According to the Israeli VAT law section 60, there is obligation to appoint representative whose permanent place of residence is in Israel, within thirty days after the start of the business in Israel.
I want to replace my fiscal representative in Israel, is that possible?
Yes, it is possible to replace fiscal representative. In order to replace a fiscal representative, the replaced fiscal representative must notify the Israel VAT in writing that he is terminating his position as a representative of the company.
Within 14 days of that notice, the company must appoint a new representative, in a written notice to the Israel VAT.
My Company in Israel provides services to foreign customers. Is there a VAT liability?
Not necessarily. According to the Israeli VAT law section 30(a) (5), there are cases in which service to a foreign resident has a VAT liability at a 0% rate, subject to the conditions in the section.
Allwira& Angel accompanies German companies with business activities in Israel, and assists with creative VAT solutions for international companies.
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