Israel VAT Guide for Nonresident SaaS and E-commerce
A practical guide for US SaaS and e-commerce companies selling into Israel. Rates, registration thresholds, filing deadlines and e-invoicing status, pulled from the same data that powers our free tools.
Zero for nonresident digital service providers under the Foreign Supplier regime. Resident threshold for VAT registration is around ILS 120,000 in annual taxable turnover.
Filing frequency
Monthly or Bimonthly
Do I need to register for VAT in Israel?
Israel charges 18% VAT (raised from 17% on 1 January 2025) on B2C digital services supplied by foreign providers. The Foreign Supplier registration regime, phased in through 2024-2025, requires nonresident sellers to register with the Israel Tax Authority and remit VAT on Israeli consumer sales. A local representative is typically required.
B2C digital services (SaaS, streaming, online ads, online media): register under the Foreign Supplier regime from the first sale to an Israeli consumer. Tax rate is 18%.
B2B digital services to a VAT-registered Israeli buyer: reverse-charge mechanism applies. The buyer self-accounts. Capture the buyer's Israeli VAT number.
Goods sales: separate from the Foreign Supplier regime. Standard import VAT applies at the border.
Fiscal representative: typically required for nonresident registration. Most US sellers retain an Israeli accounting partner.
How to register
Foreign Supplier registration runs through the Israel Tax Authority. The application is filed in Hebrew and English by the local representative on the seller's behalf.
Where: via your local representative, who files the application with the ITA. Local link: Israel Tax Authority (ITA).
What you'll need: US tax ID (EIN), articles of incorporation, local representative engagement, expected Israeli turnover, bank account details, description of digital services.
Typical timeline: 6 to 10 weeks from a complete application to ITA approval and Foreign Supplier number issuance.
Cost: Registration is free. Plan for ILS 30,000 to ILS 120,000 per year in local representative fees depending on filing volume.
Filing and deadlines
Foreign Supplier VAT returns are filed bi-monthly (every two months) by default through the ITA portal. Large taxpayers may file monthly. Returns are filed in ILS. There is no OSS overlap.
Local Israel filing frequency: Monthly or Bimonthly.
Return due: 23th of month following period.
Payment due: Same as return.
E-invoicing status in Israel
Status
Phased (threshold)
Format
XML via ITA allocation-number service
Model
Pre-clearance (allocation number)
Scope
B2B invoices above threshold
Go-live
2024-05-05
Invoices above ILS 25k (2024) require ITA-issued allocation number before input VAT can be deducted; threshold drops to ILS 20k in 2025, ILS 10k in 2026, ILS 5k by 2028.
Common mistakes US SaaS makes in Israel
Forgetting the rate step-up to 18% in January 2025. Returns covering periods from 1 January 2025 onwards must apply 18%, not 17%.
Trying to register without a local representative. The ITA typically rejects nonresident applications without one.
Treating B2B and B2C the same. Reverse charge applies for VAT-registered Israeli buyers. Charging in error means refunding and amending later returns.
Filing in USD. Foreign Supplier returns must be in ILS. Apply the official Bank of Israel rate at the time of supply.
Trusting Stripe Tax to handle Israeli VAT. Stripe collects but you remain the supplier of record. ITA registration via a local representative is still your obligation.
Not sure if you've crossed the Israel threshold?
Run a free exposure check across Israel and the major MENA, EU and APAC jurisdictions. Upload a CSV or sync Stripe; we'll show every country where you're already over the line.
Do US SaaS companies need to register for Israeli VAT?
Yes, from the first B2C sale to an Israeli consumer under the Foreign Supplier regime. A local representative is typically required to handle the Hebrew-language correspondence and ITA filings.
What is the Israeli VAT registration threshold for nonresident sellers?
Zero under the Foreign Supplier regime for B2C digital services to Israeli consumers. The resident threshold is around ILS 120,000 in annual taxable turnover.
How often do I file VAT returns for Israel sales?
Foreign Supplier returns are filed bi-monthly through the ITA. The data sources show the local Israeli filing frequency as: Monthly or Bimonthly.
Is e-invoicing mandatory in Israel?
E-invoicing status in Israel: Phased (threshold). Format: XML via ITA allocation-number service.
Can I use the EU One Stop Shop (OSS) for Israeli VAT?
No. Israel is not part of any EU scheme. Israeli VAT is filed under the Foreign Supplier regime directly with the Israel Tax Authority.