How to get VAT refunded in Israel?

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In basically every country that offers it, tax refunds are for good (and goods only) that are leaving the country with you - and you generally must show the goods to prove that you are taking them out of the country with you.

Now whilst it is possible that the "goods" component of your restaurant bill is being taken out of the country with you (depending, obviously, on how recently you visited the restaurant!), it's a little hard to show that. Plus a reasonable component of your restaurant bill will be for "services" rather that goods, so it doesn't qualify there either.

For your goods purchases, some shops will indeed show a "Tax Free Shopping" sign that means they will provide the required paperwork for the refund. These are not overly common, and generally only in places that offer higher-value goods as there is a minimum transaction amount of 400 NIS (around US$100) in order for the purchase to be eligible.

So yes, the two reasons you were provided are absolutely legitimate and correct.

You can find more details on the refund program on the Israel Governments website.

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