Israel scraps $75 VAT import exemption

The Israeli Ministry of Finance is proposing to withdraw the $75 import VAT and customs exemption on personal packages. The exemption includes shipping and insurance costs. There is a customs-only exemption up to $500.

The measure could be imposed on 1 April 2020 subject to a new government being formed.

The scrapping of the exemption reflects the boom in foreign e-commerce which means a growing amount of trade is going untaxed. The reform could raise NIS700 million per annum. In addition, it will level the playing field for domestic online and high street retailers.

Australia removed its low-value consignment stock exemption in 2017. The European Union is planning to do the same in 2021.