Israel’s VAT Tax [fraud]

In Israel, one of the powerful sales techniques used among higher-end souvenir shops is telling the tourist they will receive a “VAT refund at the airport.”

VAT stands for Value Added Tax, which currently is 16%. The VAT is what most of my readers would know as sales tax, and is added to every transaction that involves money.  However, certain services and items related to tourists are exempt from VAT, if the proper procedures are followed.

In the tourist trade, vendors who are appropriately recognized by the government offer a special receipt that allows the buyer to “get [their] VAT back” for each item they take out of the country. However, this only occurs if:

  1. a certain purchase threshold is met, and 
  2. if the shop is certified, and
  3. if the shop actually provides the appropriate form to the buyer, and
  4. the buyer shows the item at the VAT desk at the airport.

Up to this point, everything seems more or less reasonable. It’s a hassle, and some buyers don’t know the rules, or don’t receive the proper form, but it’s pretty nice to get 16% of the purchase price back.

The process is as follows:

  1. Shop in properly certified shops, which will have a green VAT REFUND logo.
  2. Purchase enough goods at the same time to meet the spending threshold. (I’ve heard different numbers, beginning at $100.)
  3. Get the proper form and keep the receipts.
  4. Do not pack the Duty Free item until it is presented to the VAT clerk located inside the departure hall, prior to the first security checkpoint. After the clerk verifies the item and stamps the form, the item may be packed in checked luggage or hand carried. Jewelry is verified only beyond passport control at the Change Place VAT desk in Duty Free. 
  5. After passing all security checks and passport control, present VAT refund forms at the Change Place VAT desk in the Duty Free hall.
  6. Receive a 16% rebate on your purchase(s) in dollars or shekels. I’ve been told that you can receive the refund via credit card also, but it takes up to three months.
  7. Fly home happy with your purchase(s) and the extra money in your pocket.

Sounds easy enough. And it is, as long as you follow the procedure exactly. However, there is one catch: At step 6, don’t expect to get 16% as you were told by the sales clerk because there is a hefty commission of 20%, which brings the actual refund to 12.8%.

I’ve been told there is a sliding commission scale, depending on how much VAT has been paid. Unfortunately, the Change Place website provides no such information. So, BUYER BEWARE! If you’re budget is dependent upon the VAT REFUND, you need to recalculate what you can afford to spend.

A Wedding Dress

Before we were married, Colleen was living in Czech Republic and I was living in Israel. Since we planned to live in Israel after our wedding, we decided that Colleen would bring her stuff to Israel and then, we would fly to Texas for our wedding. Our flight out of Israel was exactly 12 hours after Colleen arrived from Czech Republic, which isn’t quite enough time to see the sights.

When we arrived in Texas, very few details for our wedding remained to be arranged since most were either taken care of abroad, or, alternatively, by friends in Texas. Among the details that were managed from abroad was Colleen’s wedding dress, which she had custom made in Czech Republic. It was beautiful, inexpensive and hand carried. We didn’t take the chance of having it damaged or lost in checked baggage; and it came in handy as we went through airport security at Ben Gurion Airport in Tel Aviv.

Usually, Israel is a destination point, not a transit country. That being the case, I suspected that her flying from Czech Republic to the United States via Switzerland and Israel might raise some serious concerns for the security team at Ben Gurion. Particularly, if she was in Israel only 12 hours. That’s just not a normal route.

When our turn came to go through security at Ben Gurion, we approached the counter expecting to be given the “full treatment.” It seemed reasonable given our particulars: we’re not Jewish, we’re not Israeli, and Colleen had only been in the country 12 hours. The agent who handled us was thorough, but courteous, which was appreciated. As he quickly moved from question to question, he finally arrived at the standard, “where are you going and why” questions.

“Well, we’re going to Texas to get married,” I answered. He smiled as if he had finally found a chink in our armor and asked,”Can you prove that you’re going to Texas to get married.” As quickly as I noticed the look in his eye, the answer came to me: “I can’t prove that we’re going to get married, but we do have a pretty good clue. She has her wedding dress!” I responded. “Can I see it,” he countered as we seemed to be sparring now. So, with great fanfare, I “jabbed” him: “Sure! But in our tradition, I can’t see her dress before the wedding, so give me a chance to turn around!” Colleen pushed the garment bag toward our interrogator as I spun away. The timing was so perfect it had to be choreographed. But it wasn’t.

Apparently weakened by my ability to verbally spar, or more likely realizing that we were telling the truth, he delicately opened the bag just enough to peak inside. Upon recognizing that it was, in fact, a wedding dress, he blushed and quickly zipped the bag closed and said, “Okay, you can go.” And, as quickly as he zipped the bag closed he covered our bags with security stickers and moved us on to the ticket counter.

That was it: One of our easiest journeys through airport security. The interview lasted only a few minutes and the issue of Colleen’s 12 hour transit in Israel never came up. I felt victorious. Colleen was just happy that I didn’t get us dragged into the back room for the extra special attention offered to shady characters.

Next stop: Newark.

Security at Ben Gurion Airport

Todd Bolen pointed my attention to an article in Ha’aretz, an Israeli newspaper, which detailed the trials of going through security at Ben Gurion airport as an Arab. While reading Musa Budeiri’s article, I found myself nodding and grinning an “I’ve been through that” smile. Below are some of my own experiences with security at Ben Gurion Airport.

Disclaimer: In no way am I suggesting I have gone through the scrutiny that Arabs normally do. In fact, on numerous occasions at Ben Gurion, I’ve said, “I sure wouldn’t want to be an Arab trying to go through here.” I just can’t imagine the indignity that Arabs routinely suffer there.

In January 2007, after a 10-day trip to Israel to renew our family’s residence visas, I made my way to my security interview before my return flight to the USA. I arrived early, so I was one of the first in line for my flight, which turned out to be a good thing.

I’ve been in Israel long enough that I do my security interviews in Hebrew. It hasn’t always been that way for fear of misunderstanding a question and mistakenly confessing to something I didn’t do. I don’t remember when I decided to switch from English to Hebrew, but I’m sure my thought was that it would help the security folks feel more at ease and realize that I’m assimilating, thus making the process a little more comfortable for all of us, them and me.

I also assume that accompanied with my Hebrew, 10 years of legal residence in Israel should be helpful. Furthermore, it seems to me that my special residence status as clergy would be helpful, not to mention that for several years now I have been the head of Israeli delegations traveling abroad. I’m the head baseball coach of the Israeli national baseball team.

However, none of those assumptions were true on my most recent departure through Ben Gurion. The young lady who initially greeted me in the security line was friendly enough. She was surprised that I spoke to her in Hebrew, but didn’t possess an Israeli passport.

I’m not sure how that particular fact registered on her “suspicious meter,” but it didn’t take long for my answers to warrant a higher authority. We went through the normal introductory questions: “You speak Hebrew? Don’t you have an Israeli passport? What about an identity card? Where do you live? Where in Jerusalem? “

After the initial “how do you do’s,” the questions got more serious: “Where did you learn Hebrew? What do you do here? There’s baseball in Israel? There are Jews who believe in Jesus in Israel? How long have you lived here? Why Israel? Why are you traveling now? Who paid for your ticket? There’s baseball in Israel? Where? Where is your congregation? Can you give me some names of people in your congregation?”

“Hmmm,” she said before adding, “wait here” as she turned and walked away. Having gone through this drill several times over the years, I wasn’t surprised and patiently waited for another security agent to come and ask the same questions. That is customary. Apparently, they’re checking to see if I’ll offer the same answers if the questions are asked in a little different way or order.

By this time the line had grown fairly long behind me and I was starting to feel smug that I had arrived before all those people. However, though I was standing at the front of the line waiting for my second interview, people started to go around me, placing their luggage on the x-ray machine and then moving on to the check in counter. I tried to be patient as I waited, expecting each security agent that approached to stop in front of me. But for more than 30 minutes, none did and my patience lessened as each agent passed me in pursuit of someone else to interview – someone in line behind me!

Finally, an agent holding my passport stopped in front of me. In English, he introduced himself as the manager of security while my initial interrogator stood slightly behind him. “Wow! I must really rate, if they’re calling in management so quickly,” I thought. Well, . . . not exactly. Following my lead, he switched to Hebrew and asked the same questions. He was perplexed about a pastor coaching baseball, but we got that cleared up fairly quickly. He apologized for the delay and directed me to the (now) long line of people waiting for the x-ray machine.

I humbly pushed my cart to the back of the line and waited for the opportunity to load my belongings on the belt. For some people, the x-ray machine is the last stop in security. I’m not one of them. After gathering my bags on the other end of the large machine, I continued on to the next stop: The chemical sniffer.

“The chemical sniffer” is a high-tech station where a security agent takes a cotton swab and drags it across every part of the suspect’s body and belongings. I say “suspect” because by this point in the process even the most innocent persons start to question their own innocence. Undoubtedly, the Arabs at the station next to me were getting a more intrusive examination than I was, but it was hard to determine where my agents were cutting corners. My computer and camera bags were swabbed and sniffed, sent back to the x-ray, re-swabbed and sniffed upon their return, and placed at adjacent stations on the counter in front of me.

Divide and conquer seemed to be their modus operandi as two clerks began to carelessly dump x-thousand dollars worth of electronics on the counter. “Stop!” I demanded. “One at a time. I need to watch you and help you unpack that stuff.” My patience had been exhausted by this point, and it was obvious to everyone nearby. They complied with my demand: one clerk disappeared while the other allowed me to lead in the disassembly process. Once everything had been removed from my camera bag, each piece was further investigated and swabbed while the bag went back to x-ray. After an “all-clear” was given to my Nikon collection, the same process was followed for my computer bag, except that the laptop made a trip to “the back” – wherever that is – while the bag made a return visit to the x-ray machine and sniffer. While I have some ideas about what was taking place in the 15 minutes that they had my laptop out of my sight, I’ll not speculate here. Upon my computer’s reappearance, I was told that I would not be able to take my battery with me. But he didn’t simply mean that it had to be checked with my luggage, he meant it couldn’t go on the same flight. At first, I understood him to say my computer would be left behind, which gave me a flashback to a horrible 1995 trip through Ben Gurion security. When I refused to leave the computer behind, it was explained that only the battery would be delayed. I relented and signed the paperwork for the box.

My handlers were very polite – even apologetic, at times – throughout the process, but I still had a trip to the “dressing room” and a personal escort through security and passport control awaiting me. The young man who took me to the dressing room was following protocol, but seemed embarrassed to have to do so with a national team coach.

In exchange for all the hassle, the security agents managed to check me in and get me a preferred seat on my flight to Newark and a claim check for my battery – even though it wouldn’t fly until the next day.

Finally, I was released on the other side of security and passport control: I was FREE and not late for my flight! When I arrived at my gate, I was still smarting from the security process, but happy to be boarding soon – unlike the crowd at the next gate whose flight to London had just been cancelled.

When I arrived in Houston, my final destination, I went directly to lost luggage and told my story to the Continental agent who had never heard of sending a computer battery separately. I gave her my claim ticket, but the flight indicated on them still had not taken off, so the number hadn’t been entered. I was hoping this would be different than a previous experience when I didn’t see my computer for 6 weeks. I was leaving Houston by car the next morning, so I asked the agent to forward my box to Odessa, which she was happy to do. The outcome: One week later, when we arrived in Odessa, my box was waiting at the airport.

Clearly, the security efforts at Ben Gurion are effective. And there’s no doubt that I feel more secure when I fly out of Ben Gurion, but I usually feel abused, too. Surely, there is a way to accomplish real security without non-Jewish passengers feeling so violated.

Perhaps in future entries, I will write about:
-How Ben Gurion security kept my computer for 6 weeks.
-How a wedding dress was a free pass through security.
-How my Israeli friend started yelling at El Al security because of how they were treating Colleen and me.

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