How to Calculate Duties and Taxes on Imports to Israel is a critical step for any international shipper or consumer. Import duties and taxes are determined by the product's classification (HS Code), its customs valuation, and the country of origin. The calculation is managed by the Israel Tax Authority (Customs Directorate). Israel employs a tiered de minimis system: shipments valued up to $75 USD are generally exempt from all taxes, while those between $75 USD and $500 USD are exempt from customs duties only, but still subject to VAT and Purchase Tax. All taxes, when applicable, are calculated on the CIF value.
Customs duties in Israel are levied on imported goods based on their classification under the Harmonized System (HS) Code and the country of origin. Israel uses an extended 10-digit import classification structure, adding four national digits to the international 6-digit HS code for precise tariff determination. The applicable duty rate is then applied to the Customs Value of the goods. Trade agreements, such as Free Trade Agreements (FTAs) with the United States and the European Union, can significantly reduce or eliminate customs duties, provided the goods meet the specific Rules of Origin requirements.
To accurately calculate import tax in Israel and determine the total landed cost, importers must first establish the correct Customs Value. Israel uses the CIF (Cost, Insurance, and Freight) customs valuation basis for calculating both duties and taxes. This means the dutiable value includes the price paid for the goods, plus the cost of international shipping (Freight) and insurance up to the Israeli port or place of importation. This is crucial for the query 'how import duty is calculated in Israel' as it confirms that freight and insurance costs are included in the tax base.
Beyond customs duties, the main import taxes are Value Added Tax (VAT) and, for certain products, Purchase Tax. The current VAT rate in 2025 is 18%. Purchase Tax is an additional excise tax applied to specific items like entertainment electronics and motor vehicle spare parts.
The 'import tax calculator Israel' process must account for the tiered de minimis thresholds for personal imports. For shipments with a value of goods up to $75 USD, there is a full exemption from all import taxes (Customs Duty, VAT, and Purchase Tax), provided the goods are not alcohol, tobacco, or electronic cigarettes. For shipments valued between $75 USD and $500 USD, the customs duty is waived, but the 18% VAT and any applicable Purchase Tax are charged on the full CIF value (goods + shipping + insurance). Shipments over $500 USD are subject to all applicable charges: Customs Duty, VAT, and Purchase Tax, all calculated on the CIF value. Commercial importers use the national Global Gateway System for customs declarations, which is central to the clearance process.
Determine the HS Code: Classify your goods using the 10-digit Israeli import tariff code to find the specific Customs Duty rate and check for Purchase Tax applicability.
Establish the Customs Value (CIF): Calculate the total value by adding the cost of the goods (C), the cost of international insurance (I), and the cost of international freight (F) to the Israeli port of entry. This is the tax base for all charges.
Apply De Minimis Rules: Check the value of the goods (excluding separate shipping/insurance) against the $75 USD (full tax exemption) and $500 USD (customs duty exemption) thresholds to determine which taxes apply.
Calculate Total Taxes: If applicable, calculate Customs Duty (Duty Rate x CIF Value), then Purchase Tax (if applicable), and finally, the 18% VAT on the sum of (CIF Value + Customs Duty + Purchase Tax). The result is your total import tax and duty liability.
Scenario 1: Low-Value Shipment (Under $75 USD): A personal import of clothing valued at $65 USD, with $20 USD shipping. Since the value of the goods is below the $75 USD tax de minimis threshold, the shipment is fully tax-exempt (excluding alcohol/tobacco).
Scenario 2: Mid-Value Shipment (Between $75 USD and $500 USD): A personal import of a non-dutiable electronic item valued at $400 USD, with $50 USD shipping. The shipment is exempt from Customs Duty (below $500 USD duty de minimis) but is subject to VAT. The VAT is calculated on the CIF value ($400 + $50 = $450 USD). VAT due: 18% of $450 USD.
Scenario 3: High-Value Shipment (Over $500 USD): A commercial import of machinery valued at $600 USD, with $100 USD shipping and 5% Customs Duty. The Customs Value (CIF) is $700 USD. Customs Duty: 5% of $700 USD. VAT: 18% of (CIF Value + Customs Duty).
Failing to use the correct 10-digit import tariff code, which can lead to incorrect duty rates or non-compliance with regulatory requirements.
Ignoring the CIF valuation basis; all taxes, when due, are calculated on the total value including shipping and insurance, not just the product price.
Assuming a full tax exemption for shipments between $75 USD and $500 USD; only the Customs Duty is waived in this range, while VAT and Purchase Tax still apply.
Israel's 'Not Stopping at the Port' reform, effective in 2024/2025, significantly streamlines commercial imports by accepting compliance with EU standards for thousands of products. Importers can declare compliance using specific exemption codes in the Global Gateway system, reducing the need for physical port inspections and speeding up customs clearance. Additionally, two or more packages sent from the same supplier to the same importer within 72 hours are treated as a single consignment, and taxes are calculated on their combined value to prevent splitting shipments to avoid tax.
The Israel Tax Authority provides an official online calculator (in Hebrew) for personal imports, but the calculation is based on the CIF value (Cost + Insurance + Freight) and the tiered de minimis thresholds of $75 USD and $500 USD.
Import duty (mehes) is calculated as a percentage of the CIF (Cost, Insurance, Freight) value, using the rate determined by the product's 10-digit HS code and country of origin. Duty is only charged on shipments with a value of goods over $500 USD (excluding alcohol/tobacco).
The current Value Added Tax (VAT) rate on imports to Israel is 18% as of January 1, 2025. This tax applies to shipments with a value of goods over $75 USD, calculated on the CIF value plus any applicable Customs Duty and Purchase Tax.
Israel uses the CIF (Cost, Insurance, and Freight) method for customs valuation. This means the value used to calculate duties and taxes includes the cost of the goods, plus the international shipping and insurance costs.