On 01.01.2025, the Tax Authority published a clarification (https://www.gov.il/he/pages/pa010125-3) according to which, for transactions carried out from 31.03.2025, the Authority will begin to enforce its position published on 25.07.24, according to which tips given to service providers (e.g. waiters in restaurants) are subject to VAT. Please note that on 28.02.2024, an order was published in Reshumot updating the VAT rate in Israel from 17% to 18%, effective 01.01.2025.
Published in Legal Channel 431 22.01.2025 Afik & Co. https://he.afiklaw.com/
