On 24 February 2026, the Knesset (the parliament) voted to revoke a ministerial order that had expanded the VAT exemption threshold for personal imports from USD 75 to USD 150, thereby reinstating the previous threshold. The decision, passed by a 59–25 vote, follows strong opposition from domestic retailers and industry groups concerned about competitive imbalances.
The original measure, proposed by the Ministry of Finance in late 2025, aimed to alleviate cost-of-living pressures by enabling consumers to access lower-priced goods from overseas e-commerce platforms. However, stakeholders argued that the expanded exemption would disproportionately favour foreign sellers, as locally sold goods remain subject to VAT and other regulatory costs.
From a broader policy perspective, this development is particularly notable as the proposed increase in the de minimis threshold ran counter to the prevailing global trend. Across multiple jurisdictions, governments have been reducing or eliminating low-value import thresholds to address revenue leakage, ensure fair competition, and strengthen customs control over high-volume e-commerce flows. Israel’s short-lived attempt to expand the threshold therefore represents a rare policy divergence, and its reversal underscores the political and economic challenges of sustaining such an approach.
From a customs and trade compliance standpoint, companies should ensure alignment with the reinstated USD 75 threshold, with particular attention to accurate valuation, shipment structuring, and declaration practices. Enforcement focus is likely to remain on under-valuation and consignment splitting risks, especially in the context of high-volume B2C shipments.
Kindly refer to the news as reported under Globes, Israel business news:
https://en.globes.co.il/en/article-knesset-cancels-vat-exemption-hike-on-personal-imports-1001535894