VAT Calculator Israel 2026 Add, Extract and Reverse VAT

In short: how is VAT calculated in Israel in 2026?

The VAT rate in Israel is 18%, effective 1 January 2025 and still in force in 2026. To add VAT, multiply the amount by 1.18. To extract VAT from an amount that already includes it, divide by 1.18 (do not subtract 18%). The VAT itself is 15.2542% of the gross amount, and the pre-VAT amount is 84.7458% of it. Example: 1,000 before VAT becomes 1,180 including VAT, and within 1,180 the VAT is 180. And if the only figure you have is the VAT itself, divide it by 0.18 to recover the amount before VAT.

The four VAT calculations (and the one most people get wrong)

"VAT calculation" describes four different operations. The calculator at the top of this page performs all four. Here are the exact formulas at an 18% rate:

The fourth calculation is the one you need when the only figure you have is the VAT line on an invoice, without the net or the gross. Divide the VAT amount by 0.18 to get the amount before VAT, then add the VAT back for the gross. The "From the VAT amount" mode of the calculator does this in one click.

The common mistake: subtracting 18% from a gross amount

If an invoice is 1,180 including VAT, subtracting 18% gives 967.60 - which is wrong. The correct pre-VAT amount is 1,000, a gap of 32.40 on a single invoice. The reason: the 18% is calculated on the amount before VAT, not on the gross. Extracting VAT is always a division by 1.18, never a 18% deduction. Quick check: multiply your result by 1.18 - if you do not land exactly on the original amount, the extraction is wrong.

Adding 18% VAT: common amounts

Reverse VAT calculator: extracting the pre-VAT amount

Reverse VAT is the opposite of adding VAT: instead of adding VAT to a net price, you take an amount that already includes VAT and work back to the amount before VAT and to the VAT component itself. You need it when an invoice arrives as a single gross figure, when a price is displayed to customers VAT-inclusive, and when reporting income that was collected with VAT. The Extract VAT mode at the top of this page does exactly that.

The reverse VAT formula (works at any rate)

Pre-VAT amount = gross amount ÷ (1 + VAT rate ÷ 100). At 18% that is a division by 1.18. The VAT component is the difference, or multiply the gross amount by 0.152542 directly.

Warning: many calculators still divide by 1.17

Pages written before 2025 still divide by 1.17, which was correct only until 31 December 2024. Dividing by 1.17 today overstates the pre-VAT amount and understates the VAT:

Reverse VAT in Excel and Google Sheets

With the gross amount in cell A2: the pre-VAT amount is =A2/1.18, the VAT component is =A2-A2/1.18, and for a rate held in cell B2 use =A2/(1+B2), which keeps working if the rate changes again.

Extracting 18% VAT: common amounts

What is the VAT rate in Israel today?

The VAT rate in Israel today, as of August 2026, is 18%.

The standard Israeli VAT rate has been 18% since 1 January 2025, after nine years at 17%. As of August 2026 no further change has been published. The rate applies to most transactions in Israel, except zero-rated cases (such as exporting goods and services) and transactions exempt under the Value Added Tax Law. If you are correcting an older invoice, change the "VAT rate" field in the calculator to the rate in force at that time.

Historical Israeli VAT rates

VAT payable to the Israel Tax Authority

The formulas above answer pricing questions. The periodic filing is a different calculation, and that is what the third mode of the calculator does. The rule: VAT payable = output VAT minus input VAT. Output VAT is what you charged customers; input VAT is the VAT you paid on recognized business expenses. If input exceeds output, the result is negative and you are due a refund rather than a payment.

Worked example: income of 150,000 including VAT breaks down into 127,118.64 before VAT and 22,881.36 of output VAT. If you paid 6,000 of input VAT, the actual payment to the Tax Authority is 16,881.36.

Input VAT: how much of it you can actually deduct

Not all of the VAT printed on an expense invoice is VAT you may deduct. This is where most Israeli VAT calculators stop, and where most filing errors are made. Regulation 18 of the VAT Regulations states that when an expense serves both the business and private use, only a proportional share of the input VAT is deductible. Where the VAT commissioner has not set a different ratio, two fixed rates apply:

This is why the "VAT payable to the Tax Authority" mode asks for the expense total including VAT rather than the VAT inside it, and lets you pick the deduction rate. The calculator first extracts the VAT component from the expense (dividing by 1.18) and then applies the rate you chose. Worked example: vehicle expenses of 11,800 including VAT contain 1,800 of VAT, but on a mixed-use private car used mainly for business only 1,200 is deductible, a 600 gap between what the invoice shows and what may be claimed.

An invoice without an allocation number: input VAT you cannot deduct in 2026

Since 1 January 2026 a tax invoice above 10,000 before VAT requires an allocation number from the Israel Tax Authority, and from 1 June 2026 the threshold dropped to 5,000. An invoice that crosses the threshold and was issued without an allocation number does not support an input VAT deduction, even if it is otherwise a valid invoice and even if it was paid in full. That is why large invoices are worth checking before you enter them into the calculator: input VAT that will not be allowed simply does not exist in the calculation.

The practical effect for a small business: at a 5,000 threshold nearly every meaningful supplier invoice falls inside the Israel Invoices model. Before filing a VAT period, review purchase invoices above the threshold and confirm each one carries an allocation number, not merely that it was paid. A full explanation of what a tax invoice must contain and how an allocation number is issued is in the digital invoice guide.

For expenses where the deduction is partial or disputed it is still worth verifying with an accountant before filing, particularly vehicles, hospitality and mixed-use expenses where the ratio is unclear.

Filing and payment deadlines

An osek murshe (VAT-registered dealer) files monthly or bi-monthly, depending on the annual turnover the Tax Authority has set for the business.

Osek patur vs osek murshe

An osek patur (small exempt dealer) does not charge VAT and cannot credit input VAT, so the "VAT payable" mode is relevant to an osek murshe and to a limited company only. The 2026 turnover ceiling for an osek patur is 122,833 shekels per year; crossing it, even by one shekel, requires moving to osek murshe status. The exemption covers VAT only: income tax and national insurance apply from the first shekel. See the gross-to-net calculator for what is actually left after those.

More tools for business owners

• Gross to net salary calculator 2026 - net pay for employees, self-employed and company owners.
• Employer cost calculator - the full cost of employing a worker in Israel.

Sources

The 18% rate and the filing deadlines are based on Israel Tax Authority publications and the Value Added Tax Law. The mixed-use input VAT deduction rates (two thirds and one quarter) are based on Regulation 18 of the Israeli VAT Regulations. The Israel Invoices allocation number thresholds (25,000 from May 2024, 20,000 from January 2025, 10,000 from 1 January 2026 and 5,000 from 1 June 2026) and the rule that an invoice without an allocation number does not support an input VAT deduction were verified against Israel Tax Authority Israel Invoices publications and Israeli accounting firm summaries, in August 2026. The 2026 osek patur ceiling (122,833 shekels) is based on the ceiling update published in January 2026. The historical rate table is based on Israeli accounting firms' published VAT rate records. Last verified 22 August 2026.