E-invoicing mandate in Israel
Gain insights into the e-invoicing mandate in Israel, understand its implications and equip your organization to achieve and maintain regulatory compliance.
Israel moves towards real-time tax reporting
As of May 2024, Israel is entering a new era for business transactions. While traditionally a post-audit country, a Clearance CTC model is set to reshape the landscape for B2B transactions. The Clearance model the Israel Tax Authority (ITA) is currently implementing will require authorized dealers (taxpaying businesses established in Israel) to submit tax invoice data on a transactional level to the ITA in real-time in order to obtain an allocation number prior to sending the invoice to their commercial counterpart. Once the allocation number (clearance proof) has been obtained, it must be placed on the tax invoice and only then exchanged between the trading parties.
What is the implementation schedule?
5 May 2024
Mandate applies to invoices over 25,000 NIS (ca. 6,100 EUR)
1 January 2025
Mandate applies to invoices over 20,000 NIS (ca. 4,900 EUR)
1 January 2026
Mandate applies to invoices over 15,000 NIS (ca. 3,700 EUR)
What are the non-compliance penalties?
Issuer of the invoice (seller)
Currently, no penalties are imposed if sellers do not add Allocation Numbers to tax invoices. However, based on the experience of other jurisdictions, this is expected to change. Non-compliance penalties for e-invoicing in other parts of the world can range from paying a fine of at least 350 NIS (~90 EUR) to imprisonment for up to one year.
Receiver of the invoice (buyer)
Even though the buyer is not mandated to fetch invoices from the Israeli Tax Authorities Computerized Processing System (known as SHAAM) or issue any invoice responses (currently, not envisaged), buyers should control the purchase invoices they receive that lack an Allocation Number that ought to have one. In the opposite case, the buyer will not be allowed to deduct input VAT on such invoices.
FAQs: Israel's new CTC model
Under Israel's new real-time VAT reporting system, invoices must be sent for clearance by the tax authority before being sent to the recipient. What do businesses need to do in practice to ensure compliance? Read our answers to FAQs to learn the fundamentals.
Compliant e-invoicing with Pagero
Pagero’s solutions seamlessly integrate to automate purchase-to-pay and order-to-cash processes for organizations of any size. Whether in Israel or across 140 other countries, we ensure compliance by helping organizations with e-invoicing and e-reporting requirements. Get in touch to equip your company with the appropriate tools for complying with e-invoicing regulations and to facilitate business growth.
The advantages of Pagero’s e-invoicing solutions
Open network
Connect to all your partners from any ERP system, regardless of their systems and digital capabilities
Secure
Exchange encrypted and secure e-documents with all your public and private trade partners
Local expertise
We offer local expertise combined with global reach to ensure easy and borderless trade
Compliance
Your transactions will always fulfil archiving, timestamping, tax reporting and VAT requirements
Regulatory updates: Israel
Keep up to date with the latest news about Israel’s regulatory requirements.
FAQs about e-invoicing in Israel
Compliant electronic invoicing in Israel
Connect to the Pagero Network to digitalize your processes, streamline your operations and meet Israeli CTC compliance requirements — today and tomorrow.
- Send and receive electronic invoices
- Comply with the e-invoicing mandate in Israel
- Communicate digitally with all your business partners
