Israel raises the standard VAT rate from 17% to 18% from 1 January 2025
This page records one dated change. For the rules in Israel as they stand today, see the Israel guide →
- Jurisdiction
- Israel
- Tax
- VAT
- Change type
- Rate change
- Status
- In force
- Impact
- Action required
- Announced
- 20 February 2024
- Effective
- 1 January 2025
- Authority
- שר האוצר (Minister of Finance of Israel), with Knesset Finance Committee approval
- Verified
- Fetched from official source · medium confidence
All Israeli VAT dealers charging VAT on transactions, and importers of goods into Israel.
Israel's VAT (Ma’am) rate is 18% from 1 January 2025. All Israeli VAT invoices must reflect this rate.
Israel raised the standard VAT rate from 17% to 18% with effect from 1 January 2025, by an order of the Minister of Finance that the Knesset Finance Committee considered on 20 February 2024.
What changed in detail
Israel’s standard VAT rate rose from 17% to 18% with effect from 1 January 2025.
The instrument is the VAT Order (Rate of Tax on Transactions and on Import of Goods) (Amendment), 5784-2024, made by the Minister of Finance under section 2 of the VAT Law, 5736-1975, after consultation with the Knesset Finance Committee. Its text, as read into the Committee’s record on 20 February 2024, has two sections:
- in section 1 of the VAT Order (Rate of Tax on Transactions and on Import of Goods), 5765-2005, “17%” is replaced by “18%”;
- the order takes effect on 1 Tevet 5785 (1 January 2025).
The Finance Committee approved the draft order on 20 February 2024 by 10 votes to 6. As explained in the Committee’s record, once approved the order is published in Reshumot and laid before the Knesset plenum, which must approve it within two weeks. The order’s own commencement date of 1 January 2025 governs when the new rate applies.
What it means
The 18% rate is in force and is Israel’s current standard rate; no later rate change is recorded here. It has applied to transactions from 1 January 2025, so any invoice, contract price or system that still assumes 17% is wrong for supplies made after that date.
Proof
תיקון1.בסעיף 1 לצו מס ערך מוסף (שיעור המס על עסקה ועל יבוא טובין), התשס"ה- 2005, במקום "17%" יבוא "18%". תחילה2.תחילתו של צו זה ביום א' בטבת התשפ"ה (1 בינואר 2025).Amendment of section 1: in section 1 of the VAT Order (rate on transactions and imports) 2005, '17%' is replaced by '18%'. Commencement: 1 January 2025.
Source snapshot of the official page. Open full size ↗Archived from the official distribution · Knesset Finance Committee, protocol no. 328, 20 February 2024 · fs.knesset.gov.il