Import Taxes
Various import taxes are levied on some products imported to Israel. The taxes on commercial imports are calculated according to the “transaction value” at which the goods were purchased. Included in this term is the import value which is the CIF (Cost Insurance and Freight) price plus port expenses (stevedores, porters and longshoremen) in Israel. If the contract of sale was not drawn up according to the CIF price, shipping (marine, overland) and insurance expenses should be added to the value of the goods stated in the import documents.
Main Import Taxes:
- Customs – The customs rate is determined in the Customs Tariff. There are several methods for calculating the customs rate: according to the value of the goods, a specific duty or a combination of both methods in setting minimum or maximum tariffs. In addition, there is a reduced customs rate or exemption (partial or full), generally applying to rights under a specific legislation, temporary import arrangements, etc. There are also reduced customs duties or no customs duties pursuant to trade agreements with European Union countries, EFTA countries, the U.S., the Czech Republic, Slovakia, Turkey, Hungary, Poland, Slovenia, Canada, Mexico, Jordan, Romania and Bulgaria.
- Purchase Tax - Purchase tax is levied on locally manufactured goods and on imported goods. The tax is calculated as a certain percentage of the wholesale price. While purchase tax on locally manufactured goods is charged on the wholesale price, purchase tax on imports is collected from the importer at the port and is calculated according to the value of the goods for customs plus a certain percentage called TAMA (added percentage quota or import increment) which raises the value of the imported product to its wholesale price base.
- Safeguard Duties – These are levied on a limited number of imported goods under the Trade Surcharges Law. The duties apply to imports of edible oils and oil cakes.
- Dumping Charges - The competent authority may impose a dumping charge where it is proven that the export price of goods imported to Israel is lower than the customary price in the country of origin. The charge is calculated as a percentage of the difference between the export price and the customary price, or a fixed amount, or calculated in another way.
- Countervailing Duties - The competent authority may impose countervailing duties where it is proven that the goods imported to Israel were subsidized at the time of their manufacture in the country of origin.
- Value Added Tax - 18% value added tax (VAT) is charged on the sale of services and goods. The basis for calculating VAT on imports is the value of the goods plus all the applicable import taxes. This tax is deducted from the VAT that the importer must transfer in respect of his sales.
