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Israel considers VAT foreign ecommerce goods and digital services

2021/22 budget includes VAT on foreign digital services

The Israeli Ministry of Finance has announced that it will revisit again taxing e-commerce goods and digital services being provided to its consumers by non-resident sellers or providers. Israel is on of the very few developed economies that does not bring non-residents into the VAT or GST net.

Presently, imports of goods are exempt from 17% Israeli import VAT if the consignment does not exceed $75. Above this, then either the foreign seller or their Israeli customer must pay import VAT to the customs authority. Check VAT Calc’s global VAT and GST on digital services tracker to see which other countries have introduced indirect taxes on electronic services to consumers.

What digital services are likely to be subject to VAT

Income from the following services to consumers is likely to be included in the non-resident VAT regime:

  • Online advertising
  • SaaS or cloud-based software
  • Streaming and download music, video and films
  • E-books and newspapers
  • Dating websites and other membership-based sites
  • Online gaming

Africa & Middle East VAT on digital services

Comments (click for details) Rate Date Threshold Comments
Algeria 9% Jan 2020 Nil
Angola 14% Oct 2019
Bahrain 10% Jan 2019 Nil
Cameroon 19.5% Jan 2020 XAF 50 million
Egypt 14% Sep 2016 EGP 500,000
Ghana 12.5% Apr 2022 GHS 200,000
Israel 17% 2022 Proposal in 2021/22 budget
Ivory Coast 18% 2022 -
Kenya 16% Sep 2013 KES 5million
Kuwait 5% Jan 2023? - TBC
Mauritius 15% 2020
Nigeria 7.5% Jan 2020 $25,000
Oman 5% Apr 2021 OMR 35,000
Rwanda 18% TBC
Saudi Arabia 15% Jan 2018 Nil
South Africa 15% Jun 2014 ZAR 1 million
Tanzania 18% Jul 2022 Nil Residents since Jul 2015
Tunisia 19% Jan 2020 Nil Withholding VAT; 3% Royalty Tax
Uganda 18% Jan 2020 UGX 150m
United Arab Emirates 5% Jan 2018 AED 375,000
Zimbabwe 14.5% Jan 2020 Nil

 

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