VAT stands for Value Added Tax, which currently is 16%. The VAT is what most of my readers would know as sales tax, and is added to every transaction that involves money. However, certain services and items related to tourists are exempt from VAT, if the proper procedures are followed.
In the tourist trade, vendors who are appropriately recognized by the government offer a special receipt that allows the buyer to "get [their] VAT back" for each item they take out of the country. However, this only occurs if:
- a certain purchase threshold is met, and
- if the shop is certified, and
- if the shop actually provides the appropriate form to the buyer, and
- the buyer shows the item at the VAT desk at the airport.
The process is as follows:
- Shop in properly certified shops, which will have a green VAT REFUND logo.
- Purchase enough goods at the same time to meet the spending threshold. (I've heard different numbers, beginning at $100.)
- Get the proper form and keep the receipts.
- Do not pack the Duty Free item until it is presented to the VAT clerk located inside the departure hall, prior to the first security checkpoint. After the clerk verifies the item and stamps the form, the item may be packed in checked luggage or hand carried. Jewelry is verified only beyond passport control at the Change Place VAT desk in Duty Free.
- After passing all security checks and passport control, present VAT refund forms at the Change Place VAT desk in the Duty Free hall.
- Receive a 16% rebate on your purchase(s) in dollars or shekels. I’ve been told that you can receive the refund via credit card also, but it takes up to three months.
- Fly home happy with your purchase(s) and the extra money in your pocket.
I’ve been told there is a sliding commission scale, depending on how much VAT has been paid. Unfortunately, the Change Place website provides no such information. So, BUYER BEWARE! If you're budget is dependent upon the VAT REFUND, you need to recalculate what you can afford to spend.