Israel Tax Authority Explains VAT on Online Services Provided to Foreign Sellers

The Israeli Tax Authority May 21 issued a decision ruling that brokerage-marketing services provided by a resident company to nonresident e-commerce operators are subject to VAT because these services are ultimately provided to Israeli consumers (nonresident exception does not apply). Thus, the Israeli company is subject to full VAT invoicing obligations. However, the brokerage-marketing services could qualify for a zero rate VAT under a customs regulation if the service fee is part of the underlying transaction that meets threshold requirements. [Israel, Israel Tax Authority, 05/21/19]

Reference:
View Decision No. 4429/19. View Index.