Are exports from Israel zero-rated for VAT?

Yes. Under Section 30 of the Value Added Tax Law 5736-1975, goods exported outside Israel are taxed at 0% VAT. Services rendered for a non-resident customer who benefits from them entirely outside Israel are similarly zero-rated under Section 30(a)(5), provided payment is received in foreign currency and properly documented.

This allows Israeli exporters and service providers to reclaim all input VAT on their costs through the Israel Tax Authority (ITA) while charging no VAT to their overseas clients. Incorrect application of zero-rating without meeting all documentary conditions can result in reassessment to the standard 17% rate. For more detail, see VAT in Israel for Foreign Businesses and Non-Residents: A Complete Guide.