Direct answer: VAT cannot be decided from the customer’s country alone. First identify whether the transaction is goods or services, whether the customer acts as a business (B2B) or a private person (B2C), where the supplier and customer are established, and whether a special place-of-supply rule applies. In many Germany–Israel B2B service cases, the supplier does not add its domestic VAT and the business customer accounts for tax locally under a reverse-charge or imported-services mechanism. Consumer, property, digital-service and goods transactions can produce a different result.
Last reviewed: 23 July 2026. This guide gives decision rules and common examples, not a filing position. VAT treatment must be confirmed against the exact supply, contract, evidence and registration status in both countries.
1. Start with five questions
- Who is the supplier and where is that business established?
- Is the customer buying for a business or privately?
- Is the supply goods, a general service, an electronic service or a service connected with real estate?
- Where does transport begin and end, or where is the service legally treated as supplied?
- Who must report the VAT: supplier, customer under reverse charge, importer or marketplace?
2. Common service scenarios
| Supplier | Customer | Typical treatment for a general service | What must be checked |
|---|---|---|---|
| German business | German business | German VAT is normally charged unless an exemption or domestic reverse-charge rule applies. | Customer status, exemption and German special rules. |
| German business | Private individual in Germany | German VAT is normally charged. | Exempt services and special place rules. |
| German business | Israeli business buying for its business | Under the German/EU general B2B rule, the service is normally located where the customer is established, so the German supplier normally does not charge German VAT. | Evidence of business status; Israeli imported-services/reverse-charge obligations; property and other exceptions. |
| German lawyer, consultant or similar provider | Private individual resident in Israel | Section 3a(4) German UStG places specified professional and consultancy services at the non-EU customer’s residence. German VAT is therefore normally not charged on those listed services. | Whether the service falls within the statutory list; Israeli VAT consequences; use-and-enjoyment rules. |
| Israeli business | German business buying for its business | The service is normally located in Germany under the B2B rule. The Israeli supplier generally invoices without German VAT and the German business accounts for German VAT under reverse charge (§ 13b UStG). | German customer’s business status, invoice wording, German VAT return and Israeli zero-rate conditions. |
| Israeli business | Private individual in Germany | There is no single answer. Many ordinary services remain outside German VAT under the general B2C rule, but electronic services, telecommunications, property services and other special categories can be taxable in Germany/EU and may require OSS or registration. | Exact service category, place of use, EU non-Union OSS eligibility and Israeli VAT. |
3. Why “B2B” must be proved
A company name on an invoice is not always enough. The service must be acquired for the customer’s business. For EU customers, a valid VAT identification number is important evidence and can be checked through VIES. For an Israeli business customer, suppliers normally retain official registration details, a contract, business address and a statement showing the business purpose.
4. Goods moving from Germany to Israel
- German supplier to an Israeli company: a properly documented export can be exempt from German VAT under §§ 4(1)(a) and 6 UStG. The Israeli importer normally deals with customs and import VAT in Israel.
- German supplier to an Israeli consumer: export relief can also be available when the statutory export and evidence conditions are met. The buyer may face Israeli import VAT and customs/clearance charges.
- No transport out of Germany: if the goods remain in Germany, the export exemption does not apply merely because the buyer is Israeli.
5. Goods moving from Israel to Germany
- Israeli supplier to a German company: the German importer normally pays import VAT. The customs value, Incoterms and identity of the importer of record determine who carries the obligation.
- Israeli supplier to a German consumer: German/EU import VAT is generally due. For consignments with an intrinsic value up to EUR 150, an eligible seller or marketplace may use the Import One Stop Shop (IOSS) and collect VAT at checkout; otherwise the carrier or customs process may collect import VAT.
- Marketplace sales: an online marketplace can be deemed the supplier for specified imported or facilitated sales, changing who collects VAT.
6. Services connected with real estate
Services sufficiently connected with immovable property are generally taxed where the property is located. A German architect’s service for a Berlin property can therefore be German-taxable even if the client lives in Israel. Conversely, the treatment of a service tied directly to Israeli property must be checked under Israeli rules. “The client is abroad” is not a sufficient VAT conclusion.
7. Electronic services and online subscriptions
For B2C telecommunications, broadcasting and electronically supplied services, EU rules generally tax the service where the consumer resides. An Israeli supplier selling automated digital services to German consumers may therefore need to collect German VAT and can consider the EU non-Union OSS. Human professional advice delivered by email or video call is not automatically an “electronic service”; the level of automation matters.
8. The Israeli VAT side cannot be skipped
Israel has its own rules for domestic supplies, imported services and zero-rated services to foreign residents. Zero-rating is not automatic merely because the invoice is sent abroad: the recipient, beneficiary, subject matter and Israeli connection must be examined. A foreign person or company doing business in Israel may need to appoint an Israeli representative and open a VAT file; the Israel Tax Authority provides Form 22 for that process.
9. Invoice checklist
- Legal names, addresses and tax/VAT numbers of both parties.
- Clear description and supply date.
- Evidence of the customer’s business status when B2B treatment is used.
- Correct VAT rate or a precise reason for no VAT.
- Reverse-charge wording where applicable.
- Export and customs evidence for goods.
- Contract terms showing who is importer of record and who bears taxes.
Frequently asked questions
Does a German company always charge German VAT to an Israeli customer?
No. General B2B services and specified professional services to an Israeli private customer are common situations in which German VAT may not be charged, but the exact service and Israeli consequences must be checked.
Does an Israeli company charge German VAT to a German company?
For a general B2B service, the German business customer normally accounts for German VAT under reverse charge. Goods and special services follow different rules.
Does “no VAT on the invoice” mean no VAT is due anywhere?
No. It often means the customer or importer must account for VAT in the destination country.