According to the provisions of the bill, a foreign resident that operates an online store through which a digital service is provided to an Israeli resident will be required to register for Israeli VAT purposes and report and pay Israeli VAT. With respect to Digital Services provided by a foreign resident to a “dealer”, a “not-for-profit organization” or a “financial institution”, as such terms are defined in the VAT law (B2B transactions) – the recipient of the Digital Service will be liable to pay the Israeli VAT.
Source: herzoglaw.co.il
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