Israel charges a Value Added Tax (VAT) on most goods and services, and as a tourist, you may be eligible to reclaim this tax on qualifying purchases. The VAT rate in Israel is 17 percent, which represents a meaningful savings on larger purchases like jewelry, electronics, cosmetics, and clothing. This guide walks you through every step of the process.
Who Is Eligible for a VAT Refund
You are eligible for a VAT refund if you meet all of the following conditions:
- You are a foreign tourist (not an Israeli citizen or permanent resident)
- You entered Israel on a tourist visa or authorization
- You are purchasing goods to take out of the country (not services)
- Your purchase meets the minimum amount threshold per transaction
- The purchase was made at a shop participating in the VAT refund program
Israeli citizens, residents, and visitors who entered on a work visa or immigration visa are not eligible for VAT refunds.
Minimum Purchase Requirements
To qualify for a VAT refund, your purchase must meet a minimum amount per individual transaction at a single store. The minimum threshold has historically been around 400 NIS (including VAT) per invoice, though this amount is subject to change. Check the current threshold before your trip or ask at the store.
Important details about the minimum:
- The minimum applies to a single invoice from a single store on a single day
- You cannot combine purchases from different stores to reach the minimum
- Some stores allow you to combine purchases from different departments within the same store on the same day
Which Stores Participate
Not all stores participate in the VAT refund program. Participating stores display a sign indicating they offer tax-free shopping (look for signs saying “Tax Free” or “VAT Refund”). Many stores in tourist areas, shopping malls, and major retail chains participate.
Common categories of participating retailers include:
- Jewelry and diamond shops (Israel is a major diamond center)
- Fashion and clothing stores
- Cosmetics and beauty retailers (particularly Dead Sea product shops)
- Electronics stores
- Art galleries
- Souvenir and Judaica shops
How to Make a Tax-Free Purchase
Step 1: Ask for the Tax-Free Invoice
When making a qualifying purchase, tell the store clerk that you would like a VAT refund before paying. The store will issue a special tax-free invoice or refund form in addition to your regular receipt. You will need to present your passport so the store can record your details on the form.
Step 2: Keep All Documentation
For each tax-free purchase, you will receive:
- A tax-free invoice or refund form (sometimes called a Form 107)
- The original store receipt
- Any additional forms required by the refund service provider
Keep all of these documents together and in good condition. You will need them at the airport to process your refund. It helps to keep a dedicated envelope or folder in your luggage for tax-free paperwork.
Step 3: Do Not Use or Open the Goods
Technically, goods for which you claim a VAT refund should leave Israel unused and in their original packaging. In practice, enforcement varies, but it is best to keep items sealed and packaged until after you have processed your refund at the airport.
Processing Your Refund at Ben Gurion Airport
Before Check-In
The VAT refund process happens before you pass through security at Ben Gurion Airport. Follow these steps:
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Arrive early: Allow extra time before your flight. The refund process can take 20-30 minutes or more depending on queue length. Arriving at least three hours before your flight is advisable if you plan to process a refund.
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Locate the VAT refund counter: The refund desk is located in the departures hall, before the check-in counters. Look for signs directing you to “Tax Refund” or “VAT Refund.”
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Present your documents: Hand over your passport, boarding pass (or flight confirmation), tax-free invoices, and the original receipts. The refund officer may also ask to see the purchased goods, so keep them accessible (not packed deep in checked luggage) until after the refund is processed.
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Receive your refund: Refunds can typically be processed as cash (in shekels or sometimes in US dollars or euros) or credited back to your credit card. Cash refunds are immediate; credit card refunds may take several weeks to appear on your statement.
Refund Amounts
The refund you receive will be less than the full 17 percent VAT because processing fees are deducted. The net refund typically works out to approximately 12-14 percent of the purchase price, depending on the refund service provider and the method of refund you choose. Cash refunds sometimes have higher processing fees than credit card refunds.
Purchases That Do Not Qualify
The following categories are generally excluded from VAT refunds:
- Food and beverages: Groceries, restaurant meals, and consumable items
- Services: Hotel stays, car rentals, tours, spa treatments
- Tobacco products: Cigarettes and tobacco
- Electrical appliances above certain values: Some restrictions may apply to high-value electronics
- Items purchased online for local delivery: The purchase must be made in a physical store
Tips for Maximizing Your VAT Refund
- Consolidate purchases: If you plan to buy multiple items at one store, do it in a single transaction to easily meet the minimum threshold.
- Shop at participating stores: Ask whether the store offers VAT refunds before you start shopping, not after.
- Keep originals: Photocopies of invoices are not accepted. Guard your original paperwork.
- Check the forms before leaving the store: Make sure your name, passport number, and purchase details are correctly recorded. Errors on the form can delay or prevent your refund.
- Pack refund items accessibly: You may be asked to show your purchases at the refund counter. Keep them in your carry-on or at the top of your checked bag until after processing.
- Use credit card refund for larger amounts: For substantial refunds, the credit card method is often more practical than carrying large amounts of cash.
Alternative Refund Methods
Some tax-free shopping services have streamlined the process with digital solutions. Certain providers allow you to submit refund documentation electronically or process refunds at kiosks rather than waiting at the counter. Ask the store which refund service they use and whether digital options are available.
Leaving Israel by Land Border
If you are departing Israel through a land border crossing (such as the Allenby/King Hussein Bridge to Jordan or the Taba crossing to Egypt), VAT refund processing may be available but is less reliable than at Ben Gurion Airport. Confirm availability at the specific border crossing in advance and bring all your documentation regardless.
Final Reminders
- Start the refund process at the store, not at the airport
- Carry your passport when shopping for tax-free purchases
- Keep all invoices and receipts organized and accessible
- Arrive at the airport with extra time for refund processing
- The refund is a partial recovery (approximately 12-14 percent), not the full 17 percent VAT
Taking advantage of the VAT refund is well worth the small amount of planning involved, particularly if you are purchasing jewelry, cosmetics, or other higher-value items during your Israel trip.
