Israel VAT / Sales Tax

Detailed vat / sales tax rates and rules for Israel in 2026.

VAT / Sales TaxILS

Israel's VAT (Ma'am) is levied at a standard rate of 18% (increased from 17% effective January 2025). There are no reduced positive rates; transactions are either standard-rated, zero-rated, or exempt. Exports and international services are zero-rated. Exempt supplies include financial services, residential rentals (below certain thresholds), and certain real estate transactions. The city of Eilat is a VAT-free zone for most transactions.

Standard Rate

18%

Registration Threshold

ILS 120,000 annual turnover for 'exempt dealer' (patur) status, above which VAT registration is required

Reduced Rates

0% — Exports and certain services to non-residents, tourism accommodation services, fruits and vegetables (from 2024)0% — Transactions in the Eilat free trade zone are exempt from VAT

How Israel VAT / Sales Tax compares

Israel’s standard VAT / sales tax rate of 18% is the 53rd highest of 203 countries TaxAtlas tracks, above the global average of 13.7% and Asia’s regional average of 9.6%.