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Value Added Tax (VAT)

  Opening a tax identification file:  It is important for any individual (Person or company) conducting business or providing (advisory or non-advisory) services in Palestine, as well as anyone earning income from outside Palestine that is derived from their funds or deposits in Palestine, to register with the Ministry of Finance from the start of their activities or investments, regardless of the size, to avoid legal penalties.
When a tax identification file, is opened at the Value Added Tax branch, this registration includes both income tax and value-added tax. The registration process is done only once, and the applicant is required to provide a stamped lease contract of the location from the property tax department.

 Where to register:  Registration is done by visiting one of the Ministry of Finance offices distributed in all governorates.

 Registration steps:  The individual goes to the Value Added Tax department and applies along with the following documents:

 If an individual or partnership: partnership definition: An agreement between two or more persons and is a type of unregistered commercial business, managed by two (now allowed by the new Companies Law for an individual to open a company) or more project owners, called joint partners, with responsibility for managing the business of this partnership.

  • Submitting a written application to the Value Added Tax Department in his/her area to open a tax file:
  • Lease contract for the business premises (stamped by the Property Tax Department) or proof of ownership
  • Certificate to verify the taxpayer's bank account
  • Copy of the ID. Card of the individual or partners
  • Declaration and commitment provided by the department

 For partnerships only:  attach an agreement signed by a lawyer or a legal auditor.

  • The registration application is filled out by the individual or their authorized representative, signed, and then handed over to the ministry employee.
  • The employee verifies the information and ensures there is no previous registration number for the registrant
  • The registrant receives three documents:
  • Tax Identification certificate
  • Printing statement (for invoices and dispatches)
  • Clearance certificate (upon request)


  • VAT is paid monthly (before the middle of the month following previous month), and income tax is paid annually.
  • Early registration protects the individual from violations and fines. Non-registered taxpayers are deprived of all benefits and prevented from collecting value-added tax funds. They are fined and
  • penalized for non-registration and late payment.

 For the company: 

  • Submit a written application to the Value Added Tax Department in their area to open a tax file
  • Declaration and commitment provided by the department
  • Bring the lease contract (stamped by the Property Tax Department) for the company's business premises, its affiliated warehouses, branches, or proof of ownership if the premises are owned
  • Articles of Association and bylaws of the company
  • Invoice from the lawyer who registered the company
  • Certificate of registration with the Companies Registrar
  • Certificate to verify the company's bank account
  • Copies of the Partners' ID
  • Personal photos of the partners
  • Accounting system used
  • Other licenses may be requested (depending on the business nature)

 Rights guaranteed for the registrant: 

  • Right to issue tax invoices and transaction invoices per their registration
  • Right to deduct (licensed and small) input VAT under Article 34 of the law based on legal documents
  • Licensed business has the right to refund VAT surplus in cash if the inputs exceed its transactions after conducting necessary examination by the department
  • Right to cash refund under Article 35 of the Law concerning Fees on Local Products
  • Right to object and protest against the actions of the responsible person if they are deemed unfair
  • Right to represent oneself or be represented by a delegate according to the law
  • Right to receive services from the ministry unless there is a legal basis to prevent it