17 March 2016 Israel proposes legislation to collect VAT on digital services acquired from overseas suppliers The Israeli Ministry of Finance published a draft bill on March 13, to amend the VAT Law that, if passed, would require nonresident suppliers of digital services to register and account for VAT in Israel. The draft bill draws on the OECD's final report on BEPS, Action 1: Addressing the Tax Challenges of the Digital Economy, as well as on its International VAT Guidelines, and on EU law in this context. While the draft bill comes closer to a draft circular published by the Israeli Tax Authority, in April 2015, it is also a product of public consultation carried out since then. Under the draft bill, it is generally business-to-consumer supplies of digital services that would give rise to local VAT obligations on the part of nonresident suppliers. A Tax Alert prepared by EY's Global Tax Desk Network, and attached below, provides additional details. Document ID: 2016-0513 |
