How do I get a Value Added Tax refund in Israel?

Photo: Bill Soper

In Israel, one of the powerful sales techniques used among higher-end souvenir shops is telling the tourist they will receive a “VAT refund at the airport.”

VAT stands for Value Added Tax, which currently is 16%. The VAT is what most of our travelers would know as sales tax, and is added to every transaction that involves money.  However, certain services and items related to tourists are exempt from VAT, if the proper procedures are followed.

In the tourist trade, vendors who are appropriately recognized by the government offer a special receipt that allows the buyer to get their VAT refunded for each item they take out of the country. However, this only occurs if:

  1. a certain purchase threshold is met, and
  2. if the shop is certified, and
  3. if the shop actually provides the appropriate form to the buyer, and
  4. the buyer shows the item at the VAT desk at the airport.

Up to this point, everything seems more or less reasonable. It’s a hassle, and some buyers don’t know the rules, or don’t receive the proper form, but it’s pretty nice to get 16% of the purchase price back.

The process is as follows:

  1. Shop in properly certified shops, which display a green TAX REFUND logo (see above).
  2. Purchase enough goods at the same time to meet the spending threshold. (we’ve heard different numbers, beginning at $100.)
  3. Get the proper form and keep the receipts.
  4. Do not pack the Duty Free item until it is presented to the VAT clerk located inside the departure hall at Ben Gurion Airport, prior to the first security checkpoint. After the clerk verifies the item and stamps the form, the item may be packed in checked luggage or hand carried. Jewelry is verified only beyond passport control at the Change Place VAT desk in Duty Free.
  5. After passing all security checks and passport control, present VAT refund forms at the Change Place VAT desk in the Duty Free hall.
  6. Receive a 16% rebate on your purchase(s) in dollars or shekels. You can receive the refund via credit card also, but we’ve been told it takes up to three months.
  7. Fly home happy with your purchase(s) and the extra money in your pocket.

Sounds easy enough. And it is, as long as you follow the procedure exactly. However, there is one catch: At step 6, don’t expect to get 16% as you were told by the sales clerk because there is a hefty 20% commission, which brings the actual refund to 12.8%.

We’ve been told there is a sliding commission scale, depending on how much VAT has been paid. Unfortunately, the Change Place website provides no such information. So, BUYER BEWARE! If your budget is dependent upon the VAT REFUND, you need to recalculate what you can afford to spend.

*This page does not constitute legal or financial advice specific to any individual’s situation. It is a general explanation of Discipleship Travel LLC’s understanding of the VAT refund system in Israel. Your experience may differ at certain points. The shopper assumes personal responsibility to verify the proper procedure for receiving a VAT refund.

**Any shopping expenses incurred are the responsibility of the shopper and are not included in the tour price.

Do I need travel insurance or can I use my US-based health insurance?

Discipleship Travel LLC acts only as an agent for suppliers and is not responsible for damage, loss, or theft of luggage and/or personal belongings, or for personal injury, accident and/or illness. For your own protection it is important that you have sufficient insurance to cover these possibilities.

Be aware that travel insurance benefits are not limited to health related incidents. After determining your coverage needs, check with your insurance agent to determine whether your insurance plan meets your needs in Israel (or wherever you are traveling), including personal health/injury, loss/damage to belongings, and trip interruption. Note: Many US-based insurance plans do not cover you outside the United States, so get confirmation of coverage in writing! You should carry proof of insurance in case you need medical attention while abroad.

Because of the risk of misunderstanding insurance benefits and the complications that often occur when using non-Israeli insurance policies in Israel, Discipleship Travel LLC recommends purchasing travel insurance. You can choose from among the different policies we sell by clicking the Travel Guard banner below.

NOTE: Insurance is optional, but STRONGLY RECOMMENDED!

VISIT OUR FREQUENTLY ASKED QUESTIONS PAGE

Do I need an entry visa to visit Israel?

Generally, bearers of United States passports do not require prior arrangement of a tourist visa to enter Israel; visas are issued upon arrival at Ben Gurion Airport. Other nationalities should get clarification from an Israeli Embassy or consulate (see below).

Tourist visas issued at Ben Gurion Airport are typically valid for three (3) months. Those wanting to stay longer than three (3) months are required to get an extension through the Ministry of Interior.

If a traveler has had ANY previous entry-visa-related issues (in Israel), or thinks he/she might be on a no-fly list, the matter should be clarified at the Israeli Embassy or consulate closest to your home prior to departure from the United States. Discipleship Travel LLC is not responsible for denial of entry, nor any resulting damages of being denied entry to Israel.

Below is a list of locations, hours and contact information of Israeli consulates in the United States.

Atlanta
1100 Spring St. N.W., Suite 440
Atlanta, GA 30309
Tel:            404-487-6500
Fax:           404-487-6555

info@atlanta.mfa.gov.il 

Mon-Thurs      9:30am – 1:00pm

Boston
20 Park Plaza, Suite 1020
Boston, MA 02116
Tel:            617-535-0200
Fax:           617-535-0255

info@boston.mfa.gov.il

Mon-Fri      10:00am – 1:00pm
(Visits by appointment only)

Chicago
111 East Wacker Drive, Suite 1308
Chicago, IL 60601
Tel:            312-297-4800
Fax:           312-297-4855

info@chicago.mfa.gov.il
Mon-Thurs     9:30am – 1:00pm

Houston
24 Greenway Plaza, Suite 1500
Houston, TX 77046
Tel:            713-627-
Fax:           713-627-0149

consular.dep@houston.mfa.gov.il
Mon-Fri     9:30am – 12:30pm
(except national and Jewish holidays)

Los Angeles
6380 Wilshire Blvd, Suite 1700
Los Angeles, CA 90048
Tel:            323-852-5500
Fax:           323-852-5555

info@losangeles.mfa.gov.il
Mon-Fri     9:00am – 12:00pm

Miami
100 N. Biscayne (Yitzhak Rabin) Blvd
Suite 1800
Miami, FL 33132
Tel:            305-925-9400
Fax:           305-925-9455

info@miami.mfa.gov.il
Mon-Thurs      8:45am – 5:15pm

New York

800 2nd Avenue
New York, NY 10017
Tel:            212-499-5400
Fax:           212-499-5555

consular@newyork.mfa.gov.il
Mon-Fri     9:00am – 12:00pm
(Except American & Jewish holidays)

Philadelphia
1800 JFK Boulevard, Suite 1818
Philadelphia, PA 19103
Tel:            215-977-7600
Fax:           215-977-7611

info@philadelphia.mfa.gov.il
Mon-Thurs      9:00am – 1:00pm
(
Except national & Jewish holidays)

San Francisco
456 Montgomery Street, Suite 2100
San Francisco, CA 94104
(Downtown between California & Sacramento Streets)
Tel:                415-844-7500
Fax:               415-844-7555

info@sanfrancisco.mfa.gov.il
Mon-Fri     9:00am – 12:00pm

Washington DC
3514 International Drive NW
Washington DC 20008
Tel:            202-364-5500
Fax:           202-364-5607

info@washington.mfa.gov.il 
Mon-Fri     9:30am – 1:00pm