The Israeli government recently authorized the Minister of Finance's recommendation to increase Value Added Tax (VAT) from 17 percent to 18 percent. In addition, according to the government’s decision, a wage tax of nine percent instead of 8.5 percent will be imposed on non-profit organizations, and a wage tax of 18 percent instead of 17 percent will be imposed on financial institutions.
The Director General of the Department of Customs and VAT Eitan Rub recently announced that the change in the tax rate will be in force beginning on June 15, 2002. The Directorate of Customs and VAT will publish a notice to the public explaining the rules regarding the VAT rate imposed on transactions during the transition period.
Goods delivered to the purchaser before June 15, 2002 will be imposed with a 17 percent VAT. Goods delivered after June 15, 2002 will be imposed with an 18 percent VAT even if payment for the transaction was fully or partially paid for before the aforementioned date.
In cases of delivery of goods in installments, each installment is seen as an independent one, and therefore installments delivered before June 14, will be imposed with a rate of 17 percent VAT, while installments delivered after June 15, 2002 will be imposed at a rate of 18 percent.
In the case of a real estate transaction the liability to tax shall accrue at the time of payment or when the real estate is placed at the purchaser's disposal or made available for use by him, whichever is the earliest. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
