• Large companies employing more than one employee with annual sales in excess of U.S. $50,000 pay 17% VAT. Companies that fall under this category can issue a VAT invoice.
• Small companies employing more than one employee and whose annual sales do not exceed U.S. $50,000 pay 17% VAT. Small companies do not have the right to issue a VAT invoice.
•Companies with annual revenues that do not exceed U.S. $12,000 are exempt from VAT payments. These companies must declare their sales, on a self-assessed report, at the end of the tax year.
•Financial institutions such as banks and insurance companies pay a 17% VAT on employee salaries each month, and a 17% VAT on profits generated semi-annually or annually.
•Non-profit organizations are exempt from paying VAT.
•Importers pay 17% VAT on the value of imported goods. This may be deducted as input tax when the VAT is declared to the VAT administration. |
• Large companies are authorized to collect the VAT with their sales and deduct and equal amount from the VAT remitted to the government for their purchases.
• Small companies are authorized to collect the VAT and deduct an equal amount from the VAT to be paid on purchases from large companies.
•All VAT paid for business start-up costs will be refunded within one to six months of submission of the receipts.
•If there are no sales transactions during the month, the business is not required to remit the VAT.
•All refunds can be in the form of either cash or credits.
•There is no VAT on exports. |
• Exemptions from VAT are given to projects supported by the Palestinian Authority such as investments in financial institutions, preschool education, research and development projects, transportation projects, infrastructure projects, and food processing projects. |
