VAT Calculator
Add or extract VAT at 18%
- Amount before VAT
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- VAT (18%)
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- Total including VAT
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How VAT is calculated
Israeli VAT stands at 18% as of January 2025, after rising from 17%. There are two opposite calculations, and most mistakes come from confusing them.
Adding VAT to a pre-tax price
Multiply by 1.18. A price of 1,000 before VAT becomes 1,180, and the VAT is 180.
Extracting VAT from a final price
Here is the common error: you do not subtract 18% from the final amount. You divide by 1.18. A tax-inclusive price of 1,180 contains 1,000 net and 180 VAT. Subtracting 18% from 1,180 would give 967.60 — a wrong answer that tends to surface late, usually when reconciling with an accountant.
When is VAT not charged?
A small-business exemption applies below an annual turnover threshold that is updated yearly, and such a business neither charges nor reclaims VAT. Exports of goods and services are generally zero-rated, and Eilat is a free trade zone where most transactions are exempt. For any borderline case check with an accountant — this tool calculates, it does not advise.
Frequently asked questions
What is the VAT rate in Israel today?
18 percent, since 1 January 2025, after rising from 17 percent. A proposal to raise it to 19 percent in January 2026 was not adopted. The slider defaults to 18 and can be changed if you are calculating for an earlier period or another country.
How do I extract VAT from a final price?
Divide by 1.18 — do not subtract 18 percent. A tax-inclusive price of 1,180 contains 1,000 net and 180 VAT. Subtracting 18 percent from 1,180 gives 967.60, an error that usually surfaces late, when reconciling with an accountant.
Why is the reverse calculation not symmetrical?
Because the percentage is calculated on a different base in each direction. When adding, 18 percent is taken from the pre-tax amount. When extracting, that same 180 is only about 15.25 percent of the final amount. That is why simple subtraction always comes out too low.
Who is exempt from charging VAT?
A small business below an annual turnover threshold, updated yearly, neither charges nor reclaims VAT. Exports of goods and services are generally zero-rated, and Eilat is a free trade zone where most transactions are exempt.
Is this calculator suitable for tax filing?
The arithmetic is exact, but a periodic filing also involves input VAT, exempt transactions and special cases. Use it for pricing, quotes and quick checks — for the actual filing, work with your bookkeeper.
Why are amounts shown to two decimal places?
Because that is the convention on invoices. Note that large amounts may differ by one agora from another system's result because of rounding. That is normal, and accounting systems handle it with an adjustment line.
