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OOpenAccountants
openaccountants/skills/israel-vat.md
israel-vat.md435 lines17.5 KB
v20
1---
2name: israel-vat
3description: Use this skill whenever asked to prepare, review, or classify transactions for an Israel VAT (Ma'am — מע"מ) return or advise on Israeli VAT registration, filing, and reporting. Trigger on phrases like "prepare Ma'am return", "Israeli VAT", "מע"מ", "doch maam", or any Israel VAT request. ALWAYS read this skill before touching any Israel Ma'am-related work.
4version: 2.0
5jurisdiction: IL
6tax_year: 2025
7category: international
8depends_on:
9 - vat-workflow-base
10---
11 
12# Israel VAT (Ma'am — מע"מ) Skill v2.0
13 
14---
15 
16## Section 1 — Quick reference
17 
18| Field | Value |
19|---|---|
20| Country | Israel (מדינת ישראל) |
21| Tax | Ma'am (מס ערך מוסף — Value Added Tax) |
22| Currency | ILS (Israeli New Shekel — ₪) |
23| Standard rate | 17% (effective January 2025; was 17% restored after temporary 18% in 2024) |
24| Reduced rate | 0% (exports, specific agricultural produce, tourism services to non-residents) |
25| Exempt | Financial services, insurance, residential rent (if not commercial), medical services |
26| Registration threshold | ILS 120,000 annual turnover (2025 threshold); below this — "Osek Patur" (exempt dealer) |
27| Small business | Osek Murshe (עוסק מורשה) — registered dealer filing periodic returns |
28| Tax authority | Israel Tax Authority (ITA — רשות המיסים בישראל) |
29| Filing portal | Shaam Online — https://www.misim.gov.il |
30| Return form | Doch Ma'am (דוח מע"מ — Form PCN83 / PCN874) |
31| Filing frequency | Bimonthly (most businesses); Monthly (turnover > ILS 1.5M) |
32| Deadline | 15th of the month following the reporting period |
33| Tax invoices | Heshbonit Mase (חשבונית מס) required for all B2B transactions above ILS 305 |
34| Contributor | Open Accountants Community |
35| Validated by | Pending — requires sign-off by Israel-licensed CPA (רואה חשבון) |
36| Skill version | 2.0 |
37 
38### Key return form fields
39 
40| Field | Meaning |
41|---|---|
42| Iska (עסקה) | Output tax base — taxable supplies at 17% |
43| Yetsia (יציאה) | Exports / zero-rated supplies |
44| Pator (פטור) | Exempt supplies |
45| Totchaot (תשומות) | Input tax on purchases |
46| Maam Letashlum (מע"מ לתשלום) | Net Ma'am payable (Output − Input) |
47| Yiteret Totchaot (יתרת תשומות) | Excess input tax carried forward |
48| Mechira LeZar (מכירה לזר) | Sale to foreign resident (zero-rated tourism) |
49 
50### Conservative defaults
51 
52| Ambiguity | Default |
53|---|---|
54| Unknown rate on a sale | 17% standard |
55| Unknown whether export documentation complete | Treat as domestic 17% |
56| Unknown business-use % (vehicle, phone, home) | 0% input credit |
57| Unknown whether Heshbonit Mase issued | No input credit until confirmed |
58| Financial service vs professional service | Treat as professional — 17% |
59| Residential rent vs commercial | Treat as exempt until lease reviewed |
60| Foreign digital service (B2B) | Buyer self-assesses under reverse charge |
61 
62### Red flag thresholds
63 
64| Threshold | Value |
65|---|---|
66| HIGH single transaction | ILS 100,000 |
67| HIGH tax delta on single conservative default | ILS 17,000 |
68| MEDIUM counterparty concentration | >40% of output or input |
69| MEDIUM conservative default count | >4 per return |
70| LOW absolute net Ma'am position | ILS 250,000 |
71 
72---
73 
74## Section 2 — Required inputs and refusal catalogue
75 
76### Required inputs
77 
78Before starting any Israel Ma'am work, obtain:
79 
801. Osek number (מספר עוסק — 9-digit taxpayer ID) and registration certificate
812. Bimonthly bank statements in ILS (all business accounts)
823. Heshbonit Mase (tax invoices) from all suppliers — must include supplier's Osek number
834. Sales invoices issued (Heshbonit Mase or Heshbonit Kala for amounts below ILS 305)
845. Prior period Doch Ma'am (for carried-forward excess input credit)
856. Import documents from Customs (ASYCUDA / import declarations) for imported goods
867. Details of zero-rated tourism transactions (passports, foreign payment evidence)
87 
88### Refusal catalogue
89 
90Refuse and escalate to a licensed CPA (רואה חשבון) for:
91- Partial exemption (Alut Yechusit — עלות יחסית) — businesses with mixed exempt/taxable
92- Real estate Ma'am transactions (Mas Rechisha — complex exemptions on property)
93- Ma'am group registration (Kvutzat Osek — עוסק קבוצה)
94- Designated area supplies (Eilat free zone — zero-rated)
95- Diamond and precious metal special scheme
96- Ma'am on long-term contracts and construction
97- Retroactive registration for Osek Patur transitioning to Osek Murshe
98 
99---
100 
101## Section 3 — Supplier pattern library
102 
103### 3.1 Banking and financial services
104 
105| Supplier | Typical description | Ma'am rate | Input credit |
106|---|---|---|---|
107| Bank Hapoalim (בנק הפועלים) | Bank fees, wire charges | Exempt | No |
108| Bank Leumi (בנק לאומי) | Account maintenance, loans | Exempt | No |
109| Mizrahi Tefahot (מזרחי טפחות) | Mortgage, business banking | Exempt | No |
110| Discount Bank (בנק דיסקונט) | Commercial banking fees | Exempt | No |
111| Bank Otsar HaHayal (אוצר החייל) | Military banking | Exempt | No |
112| Bit (ביט — Hapoalim app) | P2P payment transfer | Exempt | No |
113| PayBox (פייבוקס — Leumi) | P2P digital wallet | Exempt | No |
114| Pelecard / Creditguard | Payment processing | 17% | Yes |
115| Tranzila | E-commerce payment gateway | 17% | Yes |
116 
117### 3.2 Electricity and utilities
118 
119| Supplier | Typical description | Ma'am rate | Input credit |
120|---|---|---|---|
121| Israel Electric Corporation (חברת החשמל — IEC) | Electricity | 17% | Yes (business) |
122| Mekorot (מקורות) | Water supply wholesale | 17% | Yes |
123| Local municipality water (ועדה מקומית) | Water — municipal | 17% | Yes |
124| Paz Gas / Supergas | Gas — cooking/heating | 17% | Yes |
125| Cellcom Energy | Green electricity supply | 17% | Yes |
126 
127### 3.3 Telecommunications
128 
129| Supplier | Typical description | Ma'am rate | Input credit |
130|---|---|---|---|
131| Cellcom (סלקום) | Mobile, broadband | 17% | Yes (business use) |
132| Partner Communications (פרטנר) | Mobile, fiber, TV | 17% | Yes (business use) |
133| Bezeq (בזק) | Fixed line, DSL internet | 17% | Yes (business use) |
134| HOT (הוט) | Cable TV, internet, phone | 17% | Yes (business use) |
135| 012 Mobile / 013 Netvision | MVNO, internet | 17% | Yes |
136| Golan Telecom (גולן טלקום) | Discount mobile | 17% | Yes |
137 
138### 3.4 Transport and travel
139 
140| Supplier | Typical description | Ma'am rate | Input credit |
141|---|---|---|---|
142| El Al (אל על) | Domestic flights (Eilat) | 17% | Yes |
143| El Al | International flights | 0% | No input credit applicable |
144| Arkia | Domestic flights | 17% | Yes |
145| Israir | Domestic flights | 17% | Yes |
146| Israel Railways (רכבת ישראל) | Train tickets | 17% | Yes |
147| Egged (אגד) | Bus — intercity | 17% | Yes |
148| Dan (דן) | Bus — Tel Aviv metro | 17% | Yes |
149| Gett (גט) | Taxi app | 17% | Yes (business use) |
150| Yango | Ride-hailing | 17% | Yes (business use) |
151 
152### 3.5 Logistics and postal
153 
154| Supplier | Typical description | Ma'am rate | Input credit |
155|---|---|---|---|
156| Israel Post (דואר ישראל) | Domestic mail, parcels | 17% | Yes |
157| DHL Israel | International courier | 0% (export) / 17% (domestic) | Yes |
158| UPS Israel | International courier | 0% / 17% | Yes |
159| FedEx Israel | International courier | 0% / 17% | Yes |
160| Ashot Logistics | Domestic delivery | 17% | Yes |
161 
162### 3.6 Retail and office supplies
163 
164| Supplier | Typical description | Ma'am rate | Input credit |
165|---|---|---|---|
166| Shufersal (שופרסל) | Supermarket — food/non-food | 17% (food not zero-rated in IL) | Yes (business) |
167| Rami Levy (רמי לוי) | Discount supermarket | 17% | Yes |
168| Office Depot Israel | Office supplies | 17% | Yes |
169| KSP (כ.ס.פ) | Electronics | 17% | Yes |
170| SuperPharm | Pharmacy — medicines | 17% (medicines not zero-rated in IL) | Yes |
171| Factory 54 / Castro | Clothing | 17% | Yes |
172 
173### 3.7 Software and digital services
174 
175| Supplier | Typical description | Ma'am rate | Input credit |
176|---|---|---|---|
177| Priority Software (פריוריטי) | Israeli ERP | 17% | Yes |
178| Greeninvoice (חשבונית ירוקה) | Cloud invoicing platform | 17% | Yes |
179| Hashavshevet (חשבשבת) | Accounting software | 17% | Yes |
180| iCount | Cloud accounting | 17% | Yes |
181| Microsoft Israel (Azure, M365) | Cloud services — B2B | 17% (buyer reverse-charge) | Yes |
182| Google Workspace IL | Cloud — B2B | 17% (buyer reverse-charge) | Yes |
183| Salesforce Israel | CRM — B2B | 17% (buyer reverse-charge) | Yes |
184| AWS Israel | Cloud infrastructure — B2B | 17% (buyer reverse-charge) | Yes |
185 
186### 3.8 Professional services
187 
188| Supplier | Typical description | Ma'am rate | Input credit |
189|---|---|---|---|
190| Roeh Heshbon (רואה חשבון — CPA) | Accounting, audit | 17% | Yes |
191| Orech Din (עורך דין — lawyer) | Legal services | 17% | Yes |
192| Munahel Ishur (מנהל אישור — notary equivalent) | Document certification | 17% | Yes |
193| Reklam / marketing agency | Advertising, PR | 17% | Yes |
194| Building contractor (קבלן) | Construction services | 17% | Yes |
195 
196### 3.9 Insurance
197 
198| Supplier | Typical description | Ma'am rate | Input credit |
199|---|---|---|---|
200| Harel Insurance (הראל) | Business insurance | Exempt | No |
201| Menora Mivtachim (מנורה מבטחים) | Property, liability | Exempt | No |
202| Clal Insurance (כלל ביטוח) | Vehicle, business | Exempt | No |
203| AIG Israel | Professional indemnity | Exempt | No |
204 
205### 3.10 Healthcare
206 
207| Supplier | Typical description | Ma'am rate | Input credit |
208|---|---|---|---|
209| Clalit (כללית) | Health fund / Kupat Holim | Exempt | No |
210| Maccabi (מכבי) | Health fund | Exempt | No |
211| Meuhedet (מאוחדת) | Health fund | Exempt | No |
212| Private clinic / specialist | Private medical | Exempt | No |
213 
214---
215 
216## Section 4 — Worked examples
217 
218### Example 1 — Standard Ma'am on consulting fee
219 
220**Scenario:** Tel Aviv software consulting firm issues Heshbonit Mase to Israeli corporate client.
221 
222**Bank statement line (Bank Hapoalim format):**
223```
224תאריך : 15/04/2025
225סוג פעולה: זיכוי - העברה בנקאית
226תיאור : TECH SOLUTIONS LTD - חשבונית 041/2025 - שכ"ט ייעוץ
227סכום : +234,000 ₪
228```
229 
230**Working:**
231- Heshbonit Mase: net ILS 200,000 + Ma'am 17% ILS 34,000 = ILS 234,000
232- Return entry: Output Iska — ILS 200,000 | Output Ma'am: ILS 34,000
233 
234---
235 
236### Example 2 — Import of goods (reverse-charge customs)
237 
238**Scenario:** Company imports electronics from Germany — customs clears at Ben Gurion.
239 
240**Bank statement line (Bank Leumi format):**
241```
242תאריך : 10/04/2025
243פעולה : שוברי רכש - פרעון / מכס ומע"מ
244תיאור : תשלום מכס ומע"מ יבוא — ASYCUDA REF 2025-04-1234
245סכום : -87,040 ₪
246```
247 
248**Working:**
249- Import customs document: CIF value ILS 400,000 + customs duty ILS 112,000 = ILS 512,000 × 17% = ILS 87,040 Ma'am
250- Pay at port of entry — then claim as input tax in Doch Ma'am filing
251- Return entry: Input Totchaot — ILS 512,000; Input Ma'am: ILS 87,040
252 
253---
254 
255### Example 3 — Zero-rated tourism service
256 
257**Scenario:** Hotel provides accommodation to foreign tourist paying in USD.
258 
259**Bank statement line (Mizrahi Tefahot format):**
260```
261תאריך : 18/04/2025
262סוג : זיכוי מטבע חוץ
263תיאור : HOTEL BOOKING - FOREIGN GUEST - BOOKING REF TL-2025-0418
264סכום : +7,650 ₪ (USD 2,100)
265```
266 
267**Working:**
268- Foreign tourist — payment in foreign currency — qualifies as zero-rated tourist service
269- Requires: passport copy, foreign payment evidence, ITA Form 1345
270- Return entry: Mechira LeZar — ILS 7,650 | Ma'am: ILS 0
271 
272---
273 
274### Example 4 — Reverse-charge on foreign digital service
275 
276**Scenario:** Company pays for Google Workspace (billed from Google Ireland).
277 
278**Bank statement line (Discount Bank format):**
279```
280תאריך : 05/04/2025
281פעולה : חיוב — שירות בנקאי חו"ל
282תיאור : GOOGLE IRELAND LTD — WORKSPACE SUBSCRIPTION APR 2025
283סכום : -5,865 ₪ (USD 1,600)
284```
285 
286**Working:**
287- Foreign digital service to Israeli business — treated as supplied in Israel
288- Buyer self-assesses: ILS 5,865 × 17/117 = ILS 852 Ma'am (or ILS 5,013 net + ILS 852 Ma'am)
289- Declare as output AND claim as input — net zero for fully taxable business
290- Return entry: Reverse-charge output ILS 5,013 | and Input Totchaot ILS 5,013
291 
292---
293 
294### Example 5 — Business vehicle purchase (blocked credit)
295 
296**Scenario:** Company purchases a passenger car (רכב פרטי) for a salesperson.
297 
298**Bank statement line (Hapoalim format):**
299```
300תאריך : 03/04/2025
301סוג פעולה: חיוב - העברה בנקאית
302תיאור : CHAMPION MOTORS LTD - רכישת רכב — חשב׳ 2025-V-041
303סכום : -175,500 ₪
304```
305 
306**Working:**
307- Passenger car (רכב פרטי): input Ma'am blocked under Section 41 of Ma'am Law
308- Heshbonit Mase shows: net ILS 150,000 + Ma'am ILS 25,500 = ILS 175,500
309- Input credit: ILS 0 — full block on private passenger vehicles
310- Record as Tier 2 — confirm whether vehicle classified as commercial (רכב מסחרי) or private
311 
312---
313 
314### Example 6 — Bimonthly return summary
315 
316**Scenario:** Tech startup — March–April 2025 bimonthly period.
317 
318| Item | Net (ILS) | Ma'am (ILS) |
319|---|---|---|
320| Software sales (domestic) | 800,000 | 136,000 |
321| Export (zero-rated) | 300,000 | 0 |
322| Total Output | 1,100,000 | 136,000 |
323| Purchases — hardware | 200,000 | 34,000 |
324| Office rent | 50,000 | 8,500 |
325| Cloud subscriptions (reverse-charge) | 30,000 | 5,100 |
326| Total Input | 280,000 | 47,600 |
327| **Net Ma'am payable** | | **88,400** |
328 
329---
330 
331## Section 5 — Tier 1 rules (compressed)
332 
333**Rate assignment:**
334- 17% standard: almost all goods and services (food, clothing, electronics, professional services — all at standard rate unlike EU VAT)
335- 0%: exports of goods with customs declaration, services exported to foreign residents used outside Israel, tourism services to non-residents with foreign currency payment
336- Exempt: financial services, insurance, residential rent (non-commercial), medical services by licensed practitioners, educational services
337 
338**Input credit:**
339- Credit allowed on all 17% purchases for taxable business activities
340- Blocked: passenger vehicles (רכב פרטי) — Section 41 Ma'am Law
341- Blocked: personal expenses — entertainment with non-business purpose
342- Partially blocked: vehicles used partly for business — 2/3 credit allowed if mixed use claimed; needs documentation
343- Reverse-charge (foreign services): output and input net to zero for fully taxable Osek Murshe
344 
345**Filing mechanics:**
346- File bimonthly via Shaam Online by 15th of following month
347- Monthly if turnover > ILS 1.5M (file by 15th of following month)
348- All B2B invoices above ILS 305 must be Heshbonit Mase with supplier's Osek number
349- Excess input credit carried forward — refund available for exporters after 3 months
350- New businesses: first 6 months allowed monthly filing to facilitate refunds
351 
352---
353 
354## Section 6 — Tier 2 catalogue (genuinely data-unknowable items)
355 
356| Item | Why unknowable | What to ask |
357|---|---|---|
358| Vehicle purchase | Private (blocked credit) vs commercial (allowed) depends on registration | "Provide vehicle licence — is it רכב פרטי or רכב מסחרי?" |
359| Home office | Business % of home use unknown | "What % of your home is used exclusively for business?" |
360| Mobile phone | Business vs personal split | "Is this a dedicated business phone? Estimate business use %." |
361| Entertainment | Must prove business purpose | "List attendees and business purpose of each entertainment expense." |
362| Mixed residential/commercial property | Residential rent exempt, commercial 17% | "Is the lease for residential or commercial use? Provide lease agreement." |
363| Export documentation incomplete | Zero-rate only with valid export evidence | "Provide customs export declaration or foreign payment evidence." |
364| Osek Patur supplier | Unregistered supplier — no Heshbonit Mase available, no input credit | "Confirm supplier registration status — Osek Murshe or Osek Patur?" |
365 
366---
367 
368## Section 7 — Excel working paper
369 
370**Columns:** Date | Supplier / Customer | Osek No. | Invoice No. | Net (ILS) | Ma'am Rate % | Ma'am (ILS) | In/Out | Zero-rated? | Exempt? | Tier 2 flag | Notes
371 
372**Tab structure:**
3731. `Output_Sales` — all sales (domestic 17%, zero-rated exports, exempt)
3742. `Input_Purchases` — all purchases with Ma'am credit
3753. `ReverseCharge_Foreign` — foreign services self-assessed
3764. `MaamSummary` — bimonthly return totals
3775. `Tier2_Items` — awaiting client response
378 
379**Key formula:**
380```
381Net_Maam_Payable = Total_Output_Maam - Total_Input_Maam - Excess_BF
382```
383 
384---
385 
386## Section 8 — Bank statement reading guide
387 
388### Bank Hapoalim format
389```
390תאריך : 15/04/2025
391סוג פעולה: זיכוי - העברה בנקאית
392תיאור : TECH SOLUTIONS - חשבונית 041/2025
393סכום : +234,000 ₪
394יתרה : 1,234,000 ₪
395```
396Fields: תאריך (date) | סוג פעולה (transaction type) | תיאור (description) | סכום (amount, ILS)
397 
398### Bank Leumi format
399```
40015.04.2025 | זיכוי | TECH SOLUTIONS | +234,000.00 | יתרה: 1,234,000.00
401```
402 
403### Key patterns:
404- **ILS number format:** Comma = thousands separator; period = decimal (ILS 234,000.00)
405- **זיכוי (credit):** Money in — match to issued Heshbonit Mase
406- **חיוב (debit):** Money out — match to received Heshbonit Mase for input credit
407- **מטבע חוץ (foreign currency):** Foreign payment — check for zero-rated export or reverse-charge
408- **מכס ומע"מ:** Customs and Ma'am — import duty + import Ma'am payment
409 
410---
411 
412## Section 9 — Onboarding fallback
413 
414When client cannot provide Heshbonit Mase for all transactions:
415 
4161. Use bank statement amounts as Ma'am-inclusive totals and back-calculate:
417 - Net = Total ÷ 1.17 | Ma'am = Total − Net
4182. Apply conservative defaults: 17% output on all unverified sales; 0% input credit without valid Heshbonit Mase
4193. Flag all items without Heshbonit Mase in Tier2_Items tab
4204. Issue data request listing missing invoice references
4215. Warn client: ITA can disallow input credit claims without valid Heshbonit Mase from Osek Murshe supplier — risk of penalty
422 
423---
424 
425## Section 10 — Reference material
426 
427| Resource | Reference |
428|---|---|
429| ITA filing portal (Shaam Online) | https://www.misim.gov.il |
430| Ma'am Law (מס ערך מוסף, 1975) | ITA website — tax law library |
431| ITA official guidance (חוזרים) | taxes.gov.il/maam |
432| Registration threshold updates | ITA annual circular |
433| Heshbonit Mase requirements | Section 9 Ma'am Law |
434| Tourist refund scheme | ITA Form 1345 guidance |
435 

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About

Use this skill whenever asked to prepare, review, or classify transactions for an Israel VAT (Ma'am — מע"מ) return or advise on Israeli VAT registration, filing, and reporting. Trigger on phrases like "prepare Ma'am return", "Israeli VAT", "מע"מ", "doch maam", or any Israel VAT request. ALWAYS read this skill before touching any Israel Ma'am-related work.

ILty-2025

IL skill: