Israel Considers Mandatory VAT Reverse Charge to Combat Construction and Staff Services Fraud

• Israel’s parliament is considering a proposal to impose a mandatory domestic reverse charge on VAT for construction and staff services.
• The aim is to tackle VAT fraud where the tax element of these transactions goes missing.
• The reverse charge shifts the VAT reporting obligations from the provider to the customer.
• Israel has a problem with fake invoices being used to unlawfully claim deductions against VAT due.
• The reverse charge would eliminate this opportunity for fraud.
• Israel is also introducing e-invoicing in Spring 2024.
• Staff services include temporary staff, cleaning staff, and security staff.

Source: vatcalc.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.