UK retail chain Marks & Spencer is opening its website to Israelis. The home page of the website invites online shoppers to "Discover our new Israeli website." The website offers express delivery in three days and free delivery of an order of more than NIS 250.
It can be assumed that the success of UK websites Next and Asus among Israeli shoppers led Marks & Spencer to eye a share of the growing online shopping pie. The chain has put prices in shekels on the website in English for the benefit of shoppers from Israel.
The Israel Postal Company will make the deliveries for the chain, both by ordinary mail and by express mail. Marks & Spencer has hundreds of stores in 40 countries around the world with prices in the medium-to-high range.
"Customs duties insurance encourages non-payment of tax"
At the same time, the Federation of Israeli Chambers of Commerce has appealed to Israeli Customs Directorate director general Avi Arditi, alleging that Israeli companies are offering customs duties insurance to purchasers on international websites that in effect encourages non-payment of tax. This refers to websites like Zipy, which offer online buyers a kind of quasi-insurance policy, in which the difference will be covered if they are required to pay tax on the package they have purchased.
The exemption ceiling for Israeli buyers on international websites is $75, and the idea of the policy refers to people buying packages prices above this ceiling. The buyers pay these companies for a service called "tax protection," which is used if the buyers have to pay the legally required tax. The sale of this protection assumes that the tax required for online purchases is not being enforced, and that they will therefore profit by selling the policy, even if they do have to pay the tax in cases that are checked. This insurance mechanism is apparently statistically worthwhile.
The appeal by the Federation of Israeli Chambers of Commerce followed a report published earlier this week on the "Chai Laila" (Night Life) program. The Federation is demanding that the Customs Directorate consider whether this arrangement encourages non-payment of tax. "According to the law, the importer is responsible for paying tax, whether the importing is personal or commercial," states the letter, signed by the Federation legal advisor Adv Shlomi Loya. "As soon as the consumer has purchased the tax protection insurance, he is acting against the interest of the true reporting according to law."
Published by Globes [online], Israel Business News - www.globes-online.com - on March 21, 2018
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