E-invoicing updates to technical specifications ahead of January 2025 full regime
Since May 2024 there has been an ongoing phased requirement for Israeli taxpayers to pre-request a unique invoice Allocation Number from the Israeli Tax Authority (ITA).
The ITA has now issued new technical speficifations (Agent invoice document types; JSON file update; and new web service)
May 2024″Invoice Law” requiring pre-reporting B2B invoices comes into effect
Taxpayers are now required to report transactions to the Tax Authority above NIS 25,000 for a unique invoice Allocation Number. Failure to do so will mean the customer will not be able to deduct the input VAT from their own VAT liabilities. The aim is to tackle the growing problem of fake invoices used to falsely reclaim input VAT.
The phased launch now proceeds as follows:
- Jan 2024: voluntary
- 5 May 2024 – above NIS 25,000 (approx €6,250 or USD 6,710)
- Jan 2025 – above NIS 20,000
- Jan 2026 – above NIS 15,000
- Jan 2027 – above NIS 10,000
- Jan 2028 – above NIS 5,000 (approx €1,300 or USD 1,600).
Mar 2024: Frequently Asked Questions ahead of launch of delayed invoice allocation number regime
The Israeli Tax Authority has issued a set of FAQ’s ahead of the 5 May 2024 e-invoicing rules. From that date, purchase invoices above NIS 25,000 can only be deducted for VAT obligations with a pre-issued .
Topics covered in the FAQ’s:
- What is an e-invoice 9-digit Allocation Number
- How to check supplier invoice Allocation Number
- How to obtain Allocation Number for your sales invoices
- How to register with IRS
- What to do if you do not receive an Allocation Number
- More FAQ’s
26 Feb: Israel delays 1 month e-invoicing to tackle fictitious invoice fraud
As expected, the IRS postponed the planned April 2024 phased launch of B2B e-invoicing – “Israel Invoices“. The new launch date is 5 May 2024. From this date, invoices
A number of the major P2P businesses, which help implement the new regime for companies, have reported that they still have not been given full access to the Tax Authority’s service despite less than six weeks to go before launch.
The additional extension is given out of consideration for the business owners who have not yet completed the technological preparation to comply with the law due to the fighting (businessmen who have completed the technological development can already issue allocation numbers). At the same time, precisely because of the war, it is very important to activate the model to deal with the phenomenon of fictitious invoices, black capital and the damage of billions of shekels to the state coffers.
The aim is to tackle the large ‘fictions invoice’ fraud problem, often used by criminal gags to launder money. The new requirement to obtain a unique digital sales invoice number – Allocation Number – from the Ministry prior to issuing an e-invoice will be for a 1-year 2025 pilot. This includes having confirmed the requirements for using certified representatives to obtain approved sales invoice numbering
The Ministry is proposing 5 phased introduction of the threshold for eligible invoices to be submitted to the Tax Authority in real-time for validation and allocation of a unique digital invoice number. Without this number, it will not be possible to deduct input VAT.
Oct 2023 – 3-month delay on 2024-28 phased introduction of e-invoicing
The Israeli Ministry of Finance is progressing a centralised Continuous Transaction Control (CTC) based electronic invoicing regime. However, due to the current crisis, the launch has been put back 3 months from 1 January to 1 April 2024.
Pre-clearance model to combat fictitious VAT invoices
The aim is to tackle the huge fraud problems around fictitious B2B VAT invoices, used by companies as deductions against their own VAT liabilities. The Tax Authority believe this costs the country billions in lost revenues. A pre-clearance model would give the tax authorities an advanced opportunity to cross-check any submitted invoice with the original supplier’s records.
The Ministry of Finance is considering a pre-clearance model, along the lines of Italy or Chile. The EU VAT in the Digital Age proposal for Digital Reporting Requirements being progressed for 2028.
You can follow VAT Calc’s global live VAT invoice transaction and e-invoice blog with country-by-country real-time reporting plans.
