Continued Updates and Reliefs in Light of the Security Situation – Taxes & Customs and the Legality of imports
30 October 2023
Dear clients and friends,
In the middle of the fourth week of the war and following the previous customer update on the subject (click here), we continue to update regarding the reliefs given by the Tax Authority and other authorities regarding indirect taxes, imports in general and the import of donations in particular, and other reliefs and instructions:
- Delaying the commence of the reform for assigning numbers to VAT invoices – the Tax Authority will allow dealers to deduct input tax from invoices without an assigned number until March 31, 2024. However, it should be noted that dealers who request numbers from the Tax Authority starting on January 1, 2024, will receive an assigned number, and the Tax Authority will even speed up the processing of their VAT refunds.
To read the announcement of the Tax Authority (in Hebrew), click here.
- Extension for the submission of periodic reports for the month of September 2023 in relation to VAT, deductions, and income tax advances – further to the previous update on this matter, the Tax Authority has decided that businesses whose transaction turnover for the year 2022 does not exceed NIS 50 million, will be able to submit and pay the periodic report for the month of September 2023 until November 27, 2023, without charging linkage differences, interest, and fines.
- Freezing of collection and enforcement procedures – the Tax Authority will not impose new foreclosures for debts, nor carry out any enforcement procedures or foreclosures until December 1, 2023 (it should be noted that the Tax Authority will update this date in accordance with the security situation and that this benefit will not be granted in exceptional cases approved by the Deputy Director of Collection Enforcement).
To read the notices published by the Tax Authority regarding granting an extension and freezing the procedures, click here.
- Periodic importer affidavit form – Customs decided that periodic importer affidavits (which expire between October 1, 2023 – January 14, 2024) will be automatically extended until January 15, 2024. However, if there is a change in one of the data of the extended importer’s affidavit, the importer must send an up-to-date affidavit that will include the change. It should be noted that a periodic importer’s affidavit must be filled out regarding imports from new suppliers or regarding affidavits whose validity has expired before October 1, 2023.
- Exclusion of transportation costs in the transaction value for the purpose of calculating import taxes – the Director General of Israel Customs published a directive regarding facilitations in the transaction value. Such facilitations are exclusion of transportation costs (of the travel and war levy type) for the purpose of calculating import taxes, starting from October 16, 2023 until further notice. The importer is required to prove the existence of the additional costs of the type of travel allowance and/or war levy and attach appropriate documents.
To read the directive of the Director General of Israel Customs (in Hebrew), click here.
- Instructions of the Commissioner of Standardization regarding the import of goods intended for military aid or donations without presentation of an official standard certificate – Further to the previous client update on this matter, it should be noted that the Commissioner clarified that his decision to permit importation without presentation of an official standard certificate applies only to the goods intended for military aid as listed in Appendix 1 to his letter (click here). Regarding the goods listed in Appendix 2 – the Commissioner clarified that an exemption from presenting a standard certificate will be granted only if the goods are imported to Israel as a donation.
- Extending the validity of periodic regulatory approvals – The validity of periodic regulatory approvals (such as certain import approvals, certain, except those excluded by law) and of foreign ATA Carnet documents (which expire between October 8, 2023 to November 30, 2023 and when the goods are in Israel and cannot be exported out of Israel) – has been automatically extended by three months.
To read our detailed client update on this matter (in Hebrew) please click here.
- Reliefs in the General Directive No. 2.6 – The Ministry of Economy and Industry (the ”MoC”) set out in a temporary order reliefs in the procedure for granting an exemption according to Section 2(c)(2) of the Free Import Order, 2014 (the “Free Import Order“) for the import of goods following a need arising from the war, until December 31, 2023, or until the end of the declaration of the special home front situation, whichever comes first. The grounds included in the temporary order are: (1) Ground 2: Import of goods used in the production process of a final product intended for sale in Israel; (2) Ground 3: Import of original spare parts for products sold in Israel; (3) Ground 5: Import of medical equipment – the condition to use all these three grounds is that the final product is intended for a security organization, an essential farm/factory or a medical institution; and (4) Ground 11: Import of goods intended for security organizations and to the defense industry.
To read the temporary order click here.
- Extension of periodic exemptions from presenting an official standard certificate pursuant to Section 2(c)(2)of the Free Import Order – In addition to the aforementioned, the MoC decided to extend by six months exemptions from presenting an official standard certificate granted pursuant to Section 2(c)(2) of the Free Import Order, and whose expiration date is From October 1, 2023 until December 31, 2023.
- Extension of the validity of the approval of an official standard of the ‘Talah’ (תל”ח) type – moreover, the Commissioner of Standardization announced the extension of validity for six months of periodic official standard approvals of the ‘Talah’ type (standard not applicable), which have expired as of October 8, 2023 or will expire by December 31, 2023.
To see the commissioner’s letter (in Hebrew), click here.
- Reducing the waiting times of imported food shipments from the quarantine stations in the ports – the National Food Service in the MoH has published instructions on the subject of: “special proactive inspections of imported food” in light of the war. The instructions provide reliefs regarding the sampling of imported foods of the type detailed in the instructions only. The instructions are in effect from October 23, 2023 until April 23, 2024, or until an earlier date provided by the director of the National Food Service, which may be for the entire instructions or only for parts of the foods listed therein.
To view the instructions (in Hebrew), click here.
- Import of medical equipment donations – the Ministry of Health (the “MoH”) decided to facilitate the import of medical equipment that is not intended for commercial marketing until November 30, 2023. Below are the two possible ways in which it will be possible to import medical equipment:
1.Import of medical equipment donations that will be exempt from the presenting an import permit from the MoH (Medical Equipment Division – AMR) for medical equipment that meets all the following conditions:
A. The medical equipment is registered and marketed in one of the following countries: Austria, Australia, Italy, Iceland, Ireland, the United States, Belgium, the United Kingdom, Germany, Denmark, the Netherlands, Greece, Norway, New Zealand, Spain, Portugal, Finland, France, Canada, Sweden, Switzerland.
B. New medical equipment in original packaging
C. The importer will sign a declaration form (click here).
2. Import of medical equipment donations subject to obtaining an import permit from the MoH (Medical Equipment Division – AMR), for equipment that meets all the following conditions:
A. Compliance with all the conditions specified in section 1 above.
B. The medical equipment must have one of the following regulatory approvals:
- FDA, CE (along with the manufacturer’s quality standard ISO 13485 + DOC).
- TGA or Health Canada.
- Medical equipment with the lowest risk can be received with DOC certificates signed by the manufacturer, along with the manufacturer’s ISO 13485 quality standard.
The request must be submitted in the MASLUL system along with the following documents: regulatory approvals, a signed declaration form (see section 1(c) above), a letter explaining the content of the donation (along with a copy of the catalog), a breakdown of quantities, an explanation to whom the donation is intended for (details of the recipient of the donation), and an invoice that includes a breakdown of quantities and HS codes.
To read the procedure of the MoH (which includes the medical equipment that received import reliefs), please click here
- Importing donations of cosmetics – the MoH also granted relief in the import of cosmetics that are not intended for commercial marketing until December 1, 2023, in the form of an exemption from presenting an import permit from the MoH. The exemption applies to the import of: (1) samples of cosmetics of any type and (2) up to 1,000 units of each type of cosmetic in a shipment of the products listed in the outline, all subject to filling out a declaration in which it is declared, inter alia, that the products are marketed in the countries of the European Union, the United Kingdom, USA and Canada, and that the products are not intended for use by infants, pregnant or lactating women.
- Release of donations to IDF soldiers– following our previous update on this matter (click here) it should be noted that in order to release donations to IDF soldiers, it is necessary to fill out a declaration form (for the Hebrew language form – please click here. For the English language form – please click here).
Hoping for more peaceful days,
The Tax and Commercial Departments
Herzog Fox & Neeman