The VAT Law provides that NPOs engaging in non-commercial business may receive the status of a “Malkar” (Hebrew abbreviation of NPOs) if the following conditions are satisfied:
- The entity must not engage in for-profit business activities.
- It must not be a financial institution.
- Organisations with Malkar status must pay VAT upon buying goods or services (the VAT rate in Israel is 17%). But they are not permitted to issue a tax invoice (ie, to collect VAT from their customers) and are not reimbursed for the VAT paid by them (input tax).
Source: lexology.com
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