When calculating Israeli customs duty, VAT, and purchase tax on imports, or advising on free trade agreement preferences.
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This Guide is general tax/accounting reference material for AI-assisted workflows. It has not been reviewed for your personal facts, documents, elections, deadlines, residency, filing status, or local procedures. Do not rely on it to file, pay, amend, or take a tax position without review by a qualified professional in the relevant jurisdiction.
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VAT standard rate
18%Israel VAT Law (Hok Mas Erech Musaf), as amended effective January 2025
Personal import VAT exemption threshold
USD 75 (cost of goods, excluding shipping and insurance)Knesset resolution revoking the Smotrich decree, 24 February 2026
Personal import threshold — prior threshold (revoked)
USD 150 (raised by Smotrich decree November 2025; revoked 24 February 2026)Smotrich decree November 2025 (subsequently revoked by Knesset 24 February 2026)
Personal import — below threshold: no customs, no VAT, no purchase tax
Below USD 75Israel Customs Ordinance (Pkudat Hamehes); Israel VAT Law
Personal import — mid-range: VAT + purchase tax apply; customs duty often waived
USD 75 – USD 500 (approx)Israel Customs Ordinance (Pkudat Hamehes); Israel VAT Law
Personal import — high value: full duty + VAT + purchase tax; commercial clearance rules apply
Above USD 500Israel Customs Ordinance (Pkudat Hamehes); Israel VAT Law
Customs duty typical range (MFN)
0–12% (many goods duty-free under MFN bindings)Shaar Olami Israeli Customs Tariff (Israel Customs Ordinance — Pkudat Hamehes)
VAT rate applied on imports
18% (on CIF + duty + purchase tax)Israel VAT Law (Hok Mas Erech Musaf), as amended effective January 2025
Purchase tax (Mas Kniya) — applies to specific items only (alcohol, tobacco, perfumes, some electronics, passenger cars); rates can be very high
Varies by HS code; alcohol and tobacco can carry rates in the hundreds of percentPurchase Tax and Excise Law (Hok Mas Kniya V'Blo), Shaar Olami tariff schedule
Customs valuation basis
CIF (cost + insurance + freight)Israel Customs Ordinance (Pkudat Hamehes); WTO Customs Valuation Agreement
Exchange rate source for customs clearance
Bank of Israel daily rate for the clearance dateIsrael Customs Ordinance (Pkudat Hamehes); Bank of Israel — https://www.boi.org.il/en/economic-roles/financial-markets/exchange-rates/
Duty calculation base
Duty = CIF × duty rateIsrael Customs Ordinance (Pkudat Hamehes)
Purchase tax calculation base
Purchase tax = (CIF + duty) × purchase tax ratePurchase Tax and Excise Law (Hok Mas Kniya V'Blo)
VAT calculation base
VAT = (CIF + duty + purchase tax) × 0.18Israel VAT Law (Hok Mas Erech Musaf)
US-Israel FTA — eliminates customs duty; origin proof required
0% customs duty with valid US Origin Invoice Declaration on commercial invoiceUS-Israel Free Trade Agreement (1985) — https://www.trade.gov/us-israel-free-trade-agreement
EU-Israel Association Agreement — eliminates customs duty; origin proof required
0% customs duty with EUR.1 or invoice declaration under €6,000EU-Israel Association Agreement — https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/israel_en
UK-Israel Trade and Partnership Agreement — eliminates customs duty; origin proof required
0% customs duty with EUR.1 or invoice declaration under €6,000UK-Israel Trade and Partnership Agreement (2019)
Canada-Israel CIFTA (modernized) — eliminates customs duty; origin proof required
0% customs duty with Form B239 certificate of originModernized Canada-Israel Free Trade Agreement (CIFTA, September 2019) — https://www.cbsa-asfc.gc.ca/publications/dm-md/d11/d11-5-6-eng.html
EFTA-Israel FTA — eliminates customs duty; origin proof required
0% customs duty with EUR.1 movement certificateEFTA-Israel Free Trade Agreement
Mercosur-Israel FTA — eliminates customs duty; origin proof required
0% customs duty with Mercosur-Israel certificate of originMercosur-Israel Free Trade Agreement (in force June 2010)
EUR.1 invoice declaration threshold — no EUR.1 stamp required below this value
€6,000 (invoice declaration by non-approved exporter sufficient below this threshold)EU-Israel Association Agreement, Protocol on rules of origin
EUR.1 — shipments above €6,000 require EUR.1 stamped by origin country customs
Above €6,000: EUR.1 movement certificate stamped by origin country's customs authority requiredEU-Israel Association Agreement, Protocol on rules of origin
EUR.1 signature requirement — electronic signatures not accepted by Israel
Wet-ink (original) signature required; Israel does NOT accept electronically signed EUR.1 certificatesIsrael Customs Ordinance (Pkudat Hamehes); EU-Israel Association Agreement, Protocol on rules of origin
Israel HS code structure — number of digits
8-digit code (6 international HS digits + 2 Israel-specific digits at positions 7 and 8)Israel Customs Tariff Ordinance (Tzav Hamehes); Shaar Olami tariff database
Personal import threshold — shipping and insurance exclusion
Shipping and insurance excluded from USD 75 personal import threshold testIsrael Customs Ordinance (Pkudat Hamehes)
Commercial import CIF base — shipping and insurance included
Shipping and insurance included in CIF for commercial importsIsrael Customs Ordinance (Pkudat Hamehes); WTO Customs Valuation Agreement
Based on work by Skills IL, licensed under MIT. Adapted for the OpenAccountants format.
| Field | Value |
|---|---|
| Country | Israel (מדינת ישראל) |
| Scope | Customs duty, VAT, and purchase tax on imports |
| Currency | NIS (Israeli New Shekel — ₪) |
| VAT rate | 18% (effective January 2025) |
| Personal import threshold | USD 75 (as of May 2026 — verify before use) |
| Tariff lookup | Shaar Olami — https://shaarolami-query.customs.mof.gov.il/CustomspilotWeb/en/CustomsBook/Import/Doubt |
| Official calculator | https://www.gov.il/en/service/customs-tax-calculation-import-by-israelis |
| Exchange rates | Bank of Israel — https://www.boi.org.il/en/economic-roles/financial-markets/exchange-rates/ |
| Tax authority | Israel Tax Authority (ITA — רשות המיסים) |
| Contributor | Open Accountants Community |
| Validated by | Pending — requires sign-off by Israel-licensed רואה חשבון or יועץ מס |
| Ambiguity | Default |
|---|---|
| Unknown personal import threshold | Use USD 75 — verify via official calculator |
| Unknown HS code (last 2 digits) | Do not guess — request pre-ruling from Israel Customs |
| Unknown origin of goods | Apply MFN duty rate (no FTA preference) |
| Unknown whether EUR.1 is valid | Treat as invalid — apply full duty |
| Unknown purchase tax rate | Check Shaar Olami for the specific 8-digit code |
| Type | Typical importer | Tax treatment |
|---|---|---|
| Personal import, small parcel | Consumer ordering online | Exemption threshold applies |
| Personal import, high-value | Consumer buying jewelry, electronics | Full duty + VAT + purchase tax |
| Commercial import (B2B) | Osek Murshe importing stock | Full duty + VAT (VAT is recoverable); no threshold exemption |
| Gift | Individual sending to an Israeli | Treated as personal import, no special exemption |
| Oleh Hadash belongings | New immigrant | Separate Oleh exemption — consult the Aliyah unit |
Courier shipments (DHL, FedEx, UPS) are self-cleared by the courier, which bills the importer duty, VAT, and a handling fee. Israel Post parcels go through postal clearance: low-value items clear automatically, items above the threshold get a payment demand before delivery. The tax math is the same; fees and timelines differ.
As of May 2026, the personal import VAT exemption is USD 75 (cost of goods, excluding shipping and insurance).
Recent history: The threshold was raised to USD 150 via a Smotrich decree in November 2025, then revoked by the Knesset on 24 February 2026, returning to USD 75. Always verify the current threshold via the official calculator before quoting a number.
| Value range | Tax treatment |
|---|---|
| Below USD 75 | No customs, no VAT, no purchase tax |
| USD 75 – USD 500 (approx) | VAT + purchase tax typically apply; customs duty often waived for personal imports |
| Above USD 500 | Full duty + VAT + purchase tax; commercial clearance rules apply |
Shipping and insurance are excluded from the personal import threshold test but are included in CIF for commercial imports. Do not mix the two rules.
Israel uses the international Harmonized System at the 6-digit level plus 2 Israel-specific digits (positions 7 and 8):
For certainty, request a free binding pre-ruling from Israeli Customs with a product description and catalog.
From the Shaar Olami entry for the HS code, read:
| Tax | Typical range | Notes |
|---|---|---|
| Customs duty | 0–12% (many goods duty-free under MFN bindings) | Varies by HS code |
| VAT | 18% standard | Applied on CIF + duty + purchase tax |
| Purchase tax (Mas Kniya — מס קנייה) | Only on specific items | Alcohol, tobacco, perfumes, some electronics, passenger cars — rates can be very high |
Purchase tax is NOT a small rounding item. Alcohol and tobacco can carry rates in the hundreds of percent.
The three taxes are calculated on a cascading base:
Israel Customs values goods at CIF: cost + insurance + freight.
CIF (NIS) = (product price + shipping + insurance) × USD-to-NIS rate
Use the Bank of Israel daily rate for the clearance date.
Duty = CIF × duty rate
Base after duty = CIF + duty
Purchase tax = base after duty × purchase tax rate
Base for VAT = base after duty + purchase tax
VAT = base for VAT × 0.18
Landed cost = CIF + duty + purchase tax + VAT + broker fees + handling
Scenario: Camera from Amazon US, USD 200 + USD 20 shipping.
| Line | Amount |
|---|---|
| Product price | USD 200 |
| Shipping | USD 20 |
| CIF (assuming USD/NIS 3.65) | NIS 803 |
| Customs duty (0% for digital cameras under MFN) | NIS 0 |
| Purchase tax (check HS code — typically 0% for cameras) | NIS 0 |
| VAT (18% on NIS 803) | NIS 145 |
| Broker/handling fee (typical parcel) | NIS 100–400 |
| Estimated total landed cost | ~NIS 1,048–1,348 |
A valid origin proof can eliminate the customs duty (but NOT VAT or purchase tax):
| Origin | Agreement | Origin proof required |
|---|---|---|
| United States | US-Israel FTA (1985) | US Origin Invoice Declaration on the commercial invoice |
| European Union | EU-Israel Association Agreement | EUR.1 movement certificate, or invoice declaration under €6,000 |
| United Kingdom | UK-Israel Trade and Partnership Agreement (2019) | EUR.1 movement certificate, or invoice declaration under €6,000 |
| Canada | Modernized CIFTA (September 2019) | Form B239 certificate of origin |
| EFTA (CH, NO, IS, LI) | EFTA-Israel Free Trade Agreement | EUR.1 movement certificate |
| Mercosur (BR, AR, UY, PY) | Mercosur-Israel FTA (in force June 2010) | Mercosur-Israel certificate of origin |
Scenario: 50 Italian leather bags, CIF €12,000, HS 4202.21.xx.
| Line | Without EUR.1 | With valid EUR.1 |
|---|---|---|
| CIF | €12,000 | €12,000 |
| Duty (6–12% typical for leather bags) | €720–1,440 | €0 (waived) |
| Purchase tax | Typically 0% | 0% |
| VAT (18% on CIF + duty) | €2,290–2,419 | €2,160 |
| Savings from EUR.1 | — | €720–1,440 duty saved |
Since CIF > €6,000, an EUR.1 movement certificate stamped by Italian customs is required (invoice declaration alone insufficient unless exporter holds approved-exporter status).
| Error | Consequence |
|---|---|
| Using US or EU HS code directly | Last 2 digits are Israel-specific — wrong code = wrong duty rate |
| Applying old personal import threshold (USD 150) | Reverted to USD 75 in February 2026 |
| Including shipping in personal threshold test | Shipping is excluded from the USD 75 test |
| Forgetting cascading tax calculation | VAT is on CIF + duty + purchase tax, not on product price alone |
| Accepting electronic EUR.1 | Israel requires wet-ink original |
| Assuming FTA removes all taxes | FTA removes duty only; VAT and purchase tax still apply |
| Underestimating purchase tax | Alcohol, tobacco, cars can have very high purchase tax rates |
| Item | Why it needs a professional |
|---|---|
| Binding HS classification pre-ruling | Complex product classification |
| Temporary import (ATA Carnet) | Different rules for goods temporarily entering Israel |
| Eilat free zone imports | Special zero-VAT zone rules |
| Oleh Hadash belongings exemption | Separate exemption schedule and eligibility rules |
| Anti-dumping duties | Certain goods from specific countries carry additional duties |
| Agricultural imports | Seasonal quotas and variable levies may apply |
| Resource | Reference |
|---|---|
| Israel Tax Authority | https://www.gov.il/en/departments/israel_tax_authority |
| Personal import calculator | https://www.gov.il/en/service/customs-tax-calculation-import-by-israelis |
| Shaar Olami tariff lookup | https://shaarolami-query.customs.mof.gov.il/CustomspilotWeb/en/CustomsBook/Import/Doubt |
| EU-Israel trade relationship | https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/israel_en |
| US-Israel FTA | https://www.trade.gov/us-israel-free-trade-agreement |
| Bank of Israel exchange rates | https://www.boi.org.il/en/economic-roles/financial-markets/exchange-rates/ |
| CIFTA rules of origin | https://www.cbsa-asfc.gc.ca/publications/dm-md/d11/d11-5-6-eng.html |
חשוב: כל המידע בקובץ זה מיועד למטרות מידע וחישוב בלבד. יש לבדוק כל עמדה מול רואה חשבון (Ro'eh Cheshbon) או יועץ מס (Yo'etz Mas) מוסמך לפני הגשה או פעולה.
This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional — such as a רואה חשבון (Ro'eh Cheshbon — CPA) or יועץ מס (Yo'etz Mas — tax advisor) licensed in Israel — before filing or acting upon.
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