Internet foreign companies will be taxed in Israel
Israel intends to collect VAT, not to mention income taxes from foreign firms, doing big business on the web in this country.
According to new guidelines recently released by the Israel Tax Authority, foreign firms, running websites and providing various paid services, including brokerage and advertising will have to pay a 17% VAT and income tax in Israel.
As for companies expected to be deal with the new regulations, we should mention Facebook, Alphabet, EBay and Amazon.
The companies mentioned above as well as other companies, doing a lot of business in this Middle East country, will have to register with authorities as an officially approved enterprise, to get subject to VAT.
By the way, until today, a foreign company’s revenue running business in Israel was exposed to tax only if it’s earned in this country. So, a company would be absolutely liable for tax if its commercial activity was regarded as a permanent establishment.
However, the Israeli government have already widened the traditional definition of that establishment and now it includes online businesses.