Israeli authorities have lengthened the amount of time dealers can spend inspecting polished diamonds without paying a 0.1% import duty.
Diamond controller Danny Tal, Israel’s regulator for the industry, will now allow companies up to 30 days to examine stones tax-free before deciding whether to buy them, as long as the goods are worth $50,000 or more, the Israel Diamond Exchange (IDE) reported this week.
The change will help large companies with factories abroad bring more goods to Israel for sorting before they ship them, IDE president Yoram Dvash wrote in a letter to members of the exchange earlier this month. Previously, many Israeli companies had goods shipped straight to their branches around the world, rather than bringing them for inspection in their home country, he said.
“The time pressure imposed by the inspection period and the tax on goods resulted in merchandise not reaching Israel,” he added.
The system also prevented Israeli firms from properly examining diamonds before purchasing or returning them, the IDE explained.
The new rule goes into effect on May 1, and will be in force until October 31, at which point officials will assess if the amendment has achieved its purpose, and whether to extend it. The change is only relevant to companies that ship polished into Israel, as the country does not charge import duty on rough diamonds.
The tax-free period is only for inspection of goods, Dvash explained. Authorities will consider anyone who changes a stone’s character — such as its weight or value — to have imported the item, and will therefore levy a charge. That includes cutting, polishing, repairing and cleaning, Dvash continued.
Image: Three Photographers