You will be granted an exemption provided that…
Many customs tariff Headings provide for a tax exemption or a reduced rate of tax, subject to compliance with certain conditions even after the goods have been released from Customs. A prominent example is the importation of a taxi, which benefits from a significantly lower tax rate than that imposed on a private or commercial vehicle. While a taxi is subject to purchase tax at a rate of 8%, the same vehicle model, when intended for commercial use, may be subject to purchase tax at a rate of 83%.
Although goods are classified for customs purposes at the time of importation, based in part on the importer’s declaration as to their intended use, the process does not end upon their release. The Israel Customs Authority may conduct post-release audits to verify that the goods are actually being used for the declared purpose and that the conditions governing the exemption or reduced tax rate have been fulfilled.
If the Customs Authority determines that the relevant conditions have not been met, it may retroactively revoke the exemption or tax relief and demand payment of the full tax shortfall. In serious cases, it may also take further enforcement measures, including the seizure and forfeiture of the goods or even the initiation of criminal proceedings.