E-invoicing mandate in Israel

The Israeli Tax Authority Computerized Processing System (SHAAM) is the ITA platform that will validate tax invoices and issue allocation numbers. 

An allocation number is essentially the approval stamp on a tax invoice that the ITA will provide the issuer of the tax invoice upon successful validation. This allocation number must be placed on the tax invoice prior to the exchange. A tax invoice that requires clearance that has not received the allocation number is not valid from a fiscal perspective.

Yes, authorized dealers may clear all their tax invoices on the SHAAM platform. 

No, ITA requires dealers to clear some other document types, incl. proforma invoices.

No. While data must be submitted to ITA in JSON format, the exchange between the supplier and the buyer may be done in any form and format agreed between the trading partners, which includes paper.

The JSON submission's content requirements set by ITA are less comprehensive compared to the current indirect tax regulations in Israel for tax invoices, and are likely insufficient from a commercial standpoint.

Simply, it is any invoice that is not physical, e.g. a paper document. As per the legal definition, it is a document created, sent, received, viewed and saved by computerized means. Note, however, that in order to be fiscally valid, a computerized invoice must be signed with a certified electronic signature.

Yes, if taxpayers want to issue e-invoices in the form of a structured format e.g XML or in the form of a PDF file, then they need to make sure that the invoice has the appropriate electronic signature. If such invoice required prior ITA clearance, it as well must display the allocation number.

• Yes. If you have processed a tax invoice that should have had the allocation number, but didn’t have it, you will not be able to deduct input VAT on this transaction. This means that as a buyer you must control all purchase invoices for whether they have an allocation number as envisaged under the implementation timetable.
• ITA is developing a feature that enables buyers to optionally retrieve SHAAM tax invoices issued to them. Use of this feature will be optional.

No, you can use other intermediary software, such as Pagero, for this purpose.

Yes, you may store your computerized invoices and messages exchanged with SHAAM outside of Israel, provided that you have received prior authorization from ITA.