Non-profit organizations will need to obtain approval from the Israel Tax Authority (VAT) to participate in government tenders as non-profit organizations

On August 15, 2022, the Israel Tax Authority (“ITA”) published guidelines regarding non-profit organizations that bid to provide services in government tenders (to read the guidelines, click here). Under the guidelines, non-profit organizations will be required to obtain approval from the ITA to classify their activities in the tenders as non-profit organizations according to the Value Added Tax Law, 1975 (hereinafter: the “VAT Law“). Following claims of discrimination against VAT dealers, the guidelines’ purpose is to regulate the participation of non-profit organizations in tenders, due to the different tax rates imposed on them.

Source: herzoglaw.co.il

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