Tuesday, January 5, 2021

Online Shopping: Guide to Taxes and Fees

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package from purchase abroad - tax free!


Do you live in Israel? 
Are you wondering what to expect regarding taxes and fees if you shop online?

This guide will help you understand the basics that apply to residents  of Israel when shopping online from overseas (yes, even if you're not a citizen, you need to know how your orders will be handled!)

Some of my favorite websites to shop from are:

Amazon ~ iHerb AliExpress ~ eBay ~ Book Depository ~ The Hut (UK) ~ The Hut (US)

Most of us shop this way to save money, so who wants a tax bill surprise when the order gets here? This post will help you avoid a tax bill (legally, of course!).

Note: the same regulations apply to packages sent from abroad, even if they are gifts!

Here's the rundown (full regulations can be found on the Israel tax authority's site)


When you get a package, the value of your purchase or package will be converted into US Dollars by the tax authority (using the exchange rate of the day they process it) to determine if it's subject to tax (no matter what currency was used when it was purchased).

Purchases up to $75/Packages with a declared value up to $75 - no taxes

Purchases or packages with a declared value above $75, up to $500 - VAT will apply in most cases (17% currently), and Purchase Tax (variable rates) may apply (purchase tax applies to very few items at this point!), but no customs taxes

Purchases or packages with a declared value over $500 - subject to all taxes (VAT of 17% , Purchase Tax (if applicable), and Customs Tax which varies by category)

Please take note that purchases and packages (even gifts) of up to $75 in value will automatically be subject to customs clearance fees if they arrive using an EMS service*, and some other type of deliveries may also be charged this fee (it's about 40 shekels right now). If the value of the purchase is higher than $75, the customs clearance fee can be higher as well.

Other fees are often added on by shipping companies, and there is not much oversight on the matter. I once saw a bill that included the following fees: Handling Fee, Import Approval Fee, VAT, Computer Fee, Unloading Fee, Storage Fee. Watch out for these fees from shipping companies/courier services - I recommend you always arrange to get your packages via a service that guarantees your fees have all been prepaid.

Please be aware that the purchase price only (not purchase + shipping) will determine whether an item will be taxed. If it is deemed taxable, all applicable taxes will be calculated on the purchase price + the shipping price. This means that if you order something for $75.01 plus $15 shipping, you will be taxed on the total value of $90.01!

One more important point: If you order multiple orders addressed to the same person, with the same address & phone number listed, from the same seller and they arrive within 72 hours of each other, customs may combine the orders and treat them as one purchase for tax purposes, or they may not. But it is a possibility you should be aware of before you place multiple orders. 

I recommend ordering at least 3 days apart, or ordering with different names and contact info (including the tax ID number you provide for clearing customs).

If your order is stuck in customs, or if you feel like you were charged tax by mistake, you will need to contact the customs office nearest you.


Here's the contact info for the various offices, taken from the meches website. I couldn't find any email addresses, sorry.

Tel Aviv
Derech HaHagana 137, Yad Eliyahu, Tel Aviv
Tel: 03-942-1730
Fax: 03-942-1733

Jerusalem
Mercaz Shatner, Givat Shaul B, Jerusalem 91999
Tel: 02-652-6193
Fax: 02-651-1589

Haifa
Sderot Pal Yam 19, Shakmona, POB 245, Haifa 31999
Tel: 04-866-4130
Fax: 04-666-9803

Eilat
Central Post Office, The Red Mall, Eilat 83100
Tel: 08-632-6476
Fax: 08-866-9702

Some of these regulations are different from what some people seem to believe, so please refer back to this guide if you are about to place an order and you're not sure what to expect taxwise.

Some of my favorite websites to shop from are:

Amazon ~ iHerb AliExpress ~ eBay ~ Book Depository ~ The Hut (UK) ~ The Hut (US)

(Amazon is particularly good because they collect taxes up front and basically guarantee that you won't be charged anything more than what they've collected!)

Sometimes I simply order from a local discounter and that way I know my taxes and fees are already covered. My favorites are WallashopsGROO, and P1000.

Join my WhatsApp group and my Facebook Group where I'll be posting my favorite deals!

*Examples of EMS services - Express Mail, Fedex, UPS and other express delivery services. Sometimes DHL is EMS and sometimes it is not.

2 comments:

  1. Does the $75 include the cost of shipping? It's never been clear to me.

    ReplyDelete
    Replies
    1. as long as the customs declaration is itemized such that the shipping is separate, shipping does not count towards the $75. Once the item is taxable, though, the taxes are on the full amount including shipping
      Hope that helps!

      Delete

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