Tuesday, 20 November 2018

Personal imports to Israel. The planned reform.

Customs Tax, VAT & Purchase Tax on Personal Imports

 

parcel

Online shopping in Israel is growing in popularity.  Whether you are ordering a bottle of nail varnish from Romania, a cover for your smartphone from China or an external hard-drive from the USA it's important to know the regulations.  Local import duties (meches), VAT ( M'AM), shipping fees (dmei mishloach) and handling fees (dmei tipul) can be applied to your personal import.

The latest reform on personal imports - April 2, 2018

Announced on 19 February, 2018 a reform to lift the value of personal imports without having to pay import duty, is now being planned.  The reform will allow imports to the value of $1,000 without having to pay import duty as opposed to the current $75.

M.K. (Member of the Knesset)Rachel Azaria was interviewed on 'Orly & Guy' - Channel 14 on 20th February, 2018 and according to her the reform is necessary.  Thousands of parcels are never collected and remain in warehouses as import duties and clearance fees on certain items far out-way the value of the item originally purchased. One example is the local retail clothing industry has dropped by 18 percent as more and more Israelis order clothing online. Azaria mentioned that this type of limitation on personal imports does not exist in other countries like the USA and the EU and Israel should follow suite.

The Finance Committee met several weeks ago and accepted the decision, and now it has to be formally drafted and submitted to Finance Minister Moshe Kahlon.If Kahlon approves the recommendation, the recommendation will be passed to the Knesset Finance Committee for approval.

Current personal import laws & regulations

  • On personal imports/purchases up to $75 there are no import duties
  • On personal imports/purchases between $75 - $500  no import duties will be levied, but VAT and Purchase Tax may apply.  (Prior t  this new legislation the maximum purchase in this category was US$325)
  • Any personal imports/purchases over $500 are subject to all taxes: customs, VAT at the current rate as well as Purchase tax. 
  • Any item with a value of over US$1,000 will require the services of an import agent.

A customs clearance fee of approximately 35 shekels may be placed on items of up to US$75 if shipped with an international delivery service (UPS, Fedex, DHL etc.).  If the value of the item is more than US$75 the clearance fee can be higher.

The purchase tax is based on the value of the item only and not on the cost of shipping.  Therefore, for example, if a $100 dollar item costs $15 to ship, the purchase tax will be levied on $100.

If the item it is found to be taxable, however, applicable taxes will be calculated on the purchase price + the shipping price.

There is no room for a "kombina" (local slang for a way to work the system - a combination) here; don't think that you can order 3 different items every day to keep the value down. If you order more than one item from the same vendor within 72 hours the orders can be combined and the purchase tax will be based on the value of all 3 items.

If you have ordered an item that is to be shipped by an international delivery service, make sure that you have all your paperwork on hand as you may be asked to come down to the customs office to prove the value of the item you purchased.  They Israeli customs are vigilant, so be warned if you are ordering electronic devices.