Israeli sellers and VAT?


#1

Can any Israeli sellers on Fiverr enlighten me with regard to the issue of VAT (“Ma’am”)?



As any Israeli business that is registered as an “Osek Murshe” should know: when collecting payment from Israeli clients, the seller must also collect an additional 18% as VAT from the client, and then pass this on to the tax authorities. (On the other hand, when collecting payment from non-Israeli clients, no VAT is involved.)



And, as far as I know, Fiverr is an Israeli company. (That is why Israeli buyers who buy via Fiverr automatically get charged an additional 18% as VAT.) So, isn’t there a need for us Israeli “Osek Murshe” sellers to in turn collect that VAT from Fiverr, and then to pass it on ourselves to the Israeli tax authorities? And, I would think that it should not matter if the buyer himself is Israeli or not, since “the one who is paying us” is Fiverr, and not the buyer.



I opened up a support-ticket with Fiverr, and received an answer that (in the case of Israeli buyers) “Fiverr already collects the VAT on your order, you don’t really need to do it again. Those funds are then transferred to the tax authorities.” But this is not what my Israeli tax-expert advised me. I’d be happy if any experienced Fiverr-sellers in Israel could shed some of their own light on this.


#2

Whats exactly the problem.
Price of GIG should include VAT and not be added after!


#3

I would like to share with you part of the answer that I ultimately received from Fiverr Support several months ago:

“As clearly indicated at our help center, it is the sole responsibility for sellers to verify their personal tax obligation, report, and pay taxes according to the laws of the state and/or country of residence, as applicable and required by local law and regulations. Meaning, Israeli sellers need to pay their taxes, including VAT, out of their payment received at Fiverr.”

This is in exact agreement with what my my Israeli tax-expert advised me all along. Namely, since the entity that is transferring your payment to you (the Seller) is the Israeli Fiverr.com, and not the individual Buyers (who for the most part live outside of Israel), you are considered to have earned this money “within Israel,” and are therefore legally responsible to collect (and pass along to the Israeli tax authorities) VAT (currently at 18%).

If Fiverr really wanted to be “nice,” it would allow us Israeli Sellers to send OUR invoices to Fiverr, requesting the normal Fiverr payment PLUS the additional 18% VAT. This would NOT really cost Fiverr any money, because they would, in turn, submit our invoices to the tax authorities and get back the VAT that they added to their payment to us!

But, of course, this would be an administrative “hassle” for them. And it also turns out that, legally, they are NOT required to perform this gentlemanly act. They DO have the right to effectively tell us Sellers in Israel: “Hey, THIS is what we’re willing to pay you – just like we pay all other Sellers elsewhere in the world. Now, go ‘break your head’: your tax obligations are not OUR problem.”


#4

Hi @technomaven, this post is two years old, so i’m wandering if you’r still around…

So if you are here, I hope you are well.
I’m also from Israel and want to start working with Fiverr, though reading what you wrote made me a bit uncomfortable… I was wandering if these VAT issues still exist in 2018, or has something changed with regards to the policies… (in Israel or in Fiverr.com)

Also, as a newbie, I have to ask - does the “VAT ID” mean that I have to be “Osek Murshe” or “Osek Patur” in Israel in order to work with Fiverr as a seller?

Thank you very much,
to whom ever will answer!
:heart: