AA 21657-11-19 Hagshama Cosmi Project Management Ltd. v. Director of Value Added Tax – Tel Aviv Center
AA 21657-11-19 Hagshama Cosmi Project Management Ltd. v. Director of Value Added Tax – Tel Aviv Center (Nevo 10.07.2022):
The Court accepted the appellant's appeal against the decision of the VAT Director to charge the appellant full-rate VAT for the provision of promotional hostess services to foreign cosmetics companies at Duty Free shops in Israel.
The appellant provides sales promotion and hostess services to cosmetics companies that are foreign residents, for the sale of their products at Duty Free – James Richardson. The appellant reported these services as subject to zero-rate VAT pursuant to Section 30(a)(5) of the VAT Law. According to its position, the latter part (sifa) of Section 30(a)(5) of the VAT Law applies to said services, which grants zero-rate VAT for services rendered to a foreign resident, even where, in addition to the foreign resident, an Israeli resident in Israel also receives the service, provided that the consideration for the service constitutes part of the value of the goods imported in accordance with the Customs Ordinance. The Court held that the application of the aforementioned sifa does not require actual payment of tax upon the import or sale of the goods, and that according to the language of the section, it is sufficient that the services are included in the value of the imported goods.
