Capital
Jerusalem (limited recognition)
Currency
ILS
Languages
Hebrew, Arabic
Population size
9.3 million
Average Monthly Salary
~€$,800
Region
Middle East
Gift Giving Norms
Respectful, culturally aware, ships from EU warehouse
Major Corporate Gift Days
Rosh Hashanah, Passover
Customs Complexity
Moderate
VAT - Standard Rate
VAT ~17%
Duty Free Threshold
$75 personal import threshold
Ave Duty Rate
Varies by product
1. Employee Swag vs. Gifts
Under Israeli tax law, non-cash benefits provided to employees can be taxable if they serve as personal perks rather than essential job tools. The Israeli Tax Authority (ITA) determines whether an item is necessary for work or is a taxable benefit.
1.1 Swag for Employees
Work-Related (Generally Non-Taxable)
Uniforms & Necessary Tools
If branded clothing or protective gear is integral to an employee’s duties, it usually does not count as taxable.
Branded Accessories
T-shirts, pens, or mugs carrying a visible company logo—uniformly given to staff—are often considered part of corporate identity rather than personal possessions.
Potentially Taxable Benefits
High-Value or Personal Items
Electronics, designer wear, or products with little direct relevance to daily work tasks might be treated as part of an employee’s taxable income. Employers would then address wage tax (PAYE) or social contributions accordingly.
Frequent Gifting
Repeated distributions of swag throughout the year might raise suspicion of disguised remuneration. Seek local tax advice if planning multiple employee gifts.
1.2 Gifts for Non-Employees (Clients, Partners, Event Attendees)
Tax & Deductibility
Israel generally permits tax deductions for business gifts, provided they genuinely support promotion or client relations. Excessive or frequent gifts may spark review by the ITA.
Compliance & Religious Sensitivity
Israel has a diverse religious and cultural context. Maintaining records of higher-value gifts is prudent, particularly when dealing with regulated sectors or public entities.
1.3 Marketing Swag
Promotional Swag
Branded items (like T-shirts, tote bags) distributed at fairs or product events typically qualify as marketing expenses, assuming documentation (invoices, distribution logs) proves their promotional intent.
2. Shipping, Customs & Duties
Although not in the EU, Israel has free trade agreements with several countries (including the EU), possibly reducing or removing some import duties if rules of origin apply.
2.1 Shipping
Shipping from the EU to Israel generally requires a commercial invoice, HS codes, and potentially an EUR.1 certificate if goods meet certain origin rules (this can reduce duties under the EU–Israel agreement).
2.2 Importing
Israel often applies VAT (17%) on imported goods above its personal import thresholds (~$75 for personal shipments). For corporate shipments, standard import VAT/duties might apply unless preference is claimed.
2.3 DDP vs. DAP
Delivered Duty Paid (DDP): We or the sender cover all import fees, easing receipt for the Israeli consignee.
Delivered At Place (DAP): The recipient handles duties/VAT upon arrival, which can lead to delays if not pre-warned.
2.4 With Monday Merch
We dispatch from our EU warehouse, and we ensure an easy, tax compliant process.
3. Cultural & Local Etiquette
3.1 Swag customs
Diverse Cultural Factors
Israel is home to Jewish, Muslim, Christian, and other communities. Gifts should be respectful of potential dietary or religious restrictions.
Gift-Giving Occasions
Rosh Hashanah (Jewish New Year) and Passover are significant times for gifting in Jewish culture. Some companies also prefer year-end or major event gift distribution.
Practical & Appropriate
Overly lavish or purely decorative gifts may be less appreciated. Practical or symbolically meaningful items that respect local traditions can go a long way.
4. Sustainability & Local Regulations
4.1 Sustainability & Regulations
Eco-Conscious Trend
Israel is advancing in environmental initiatives, though not as standardized as EU mandates. Sustainable or minimal packaging resonates with environmentally aware recipients.
Product Labeling & Standards
For certain items (electronics, kids’ goods), local safety or language requirements could apply. Some EU-based standards also carry weight, especially if items were CE-marked before shipping.
5. HR & Employee Relations Considerations
5.1 HR & Employee Relations
Data Protection & Privacy
If shipping to home addresses, ensure robust data handling. Israel has data protection laws, though not identical to GDPR—mirroring best practices is recommended.
Onboarding & Retention
Welcome kits (like branded T-shirts or desk items) generally remain non-taxable if considered modest and relevant to the workplace identity.
6. Summary and Key Takeaways
6.1 Summary & Takeaways
Employee Items vs. Taxable Benefits
Work-required uniforms or tools are non-taxable.
Personal or high-value goods might be deemed taxable salary.
B2B Gifting & Marketing
Deductions for corporate gifts are allowed if clearly promotional and tracked.
Promotional swag qualifies as marketing expenses if properly documented.
Shipping from EU Warehouse
Potential duty reductions under the EU–Israel trade agreement with an EUR.1 if rules of origin are met.
Typically, Israel imposes 17% VAT on imports.
Monday Merch dispatches from the EU, ensuring a simpler, tax compliant process.
Culture & Sensitivity
Respect religious considerations (e.g., kosher, Halal) if relevant.
Rosh Hashanah, Passover are key gifting periods.
7. Frequently Asked Questions
7.1 Questions & Answers
Do employees get taxed on branded swag?
If it’s purely job-related with clear logos, usually not; personal items can be taxed as benefits.
Are business gifts deductible?
Yes, if used for promotion or relationship-building within cost limits—keep receipts for Israeli tax compliance.
How do we ship to Israel from Monday Merch?
We ship from our European warehouse. Customs/vat rules apply if goods exceed thresholds entering Israel.
Sources
Israel Tax Authority – Official guidance on tax obligations, including corporate and personal taxes.
Israel Customs (Ministry of Finance) – Info on import regulations, HS codes, and any FTA preferences.
Israel Export Institute – Business resources for compliance and local market specifics.
Disclaimer
This guide is for informational purposes only and does not constitute legal or tax advice. Always consult the Israel Tax Authority or local specialists to stay fully tax compliant.
