E-Invoicing in Israel

Israel’s e-invoicing mandate, officially known as the Israel Invoice Model, is a government-run electronic invoicing system operated by the Israel tax authority (ITA). Under this system, suppliers issuing business-to-business (B2B) tax invoices must first obtain a unique allocation number from the ITA before the invoice can be legally issued to the buyer.

The invoice data is transmitted electronically to the ITA using a secure REST API in JSON format. Once the invoice passes the validation checks, the ITA immediately returns an allocation number. This number must appear on the invoice and serves as official proof that the transaction is registered with the tax authority. Without this number, the buyer cannot legally deduct input VAT.

The goal of the mandate is to combat VAT fraud and fictitious invoices, improve transparency, and create a real-time digital link between suppliers, buyers, and the Israel Tax Authority.

The mandate applies to all VAT-registered businesses operating in Israel that issue or receive B2B tax invoices exceeding the threshold defined by the ITA.

It does not apply to B2C transactions (sales to final consumers) or B2G transactions (invoices issued to government bodies) at this stage.

Foreign entities without VAT registration in Israel are outside the system, and cross-border invoices such as exports or imports are not included.

No. The current Israel Invoice model applies only to domestic transactions between VAT-registered businesses.

Invoices for exports, imports, or services rendered to or from foreign entities remain outside the allocation-number regime. These transactions are still reported through the traditional VAT return process. However, businesses engaged in both domestic and export activity must ensure that only their domestic B2B invoices are routed through the Israel Invoice API.

If the ITA’s system detects irregularities such as invalid VAT IDs, mismatched totals, or potential fraud indicators it may refuse or hold the allocation number request.

A “held” invoice is temporarily blocked for VAT deduction. The supplier must review the issue, correct any errors, and resubmit or appeal the decision.

Until the invoice receives a valid allocation number, it is not fiscally valid and cannot be used for input VAT deduction by the buyer.

Before deducting input VAT, each buyer should verify that the supplier’s invoice includes a valid allocation number issued by the Israel Tax Authority. Verification can be done through the ITA’s online invoice-details verification service.

Authorised dealers and anyone who has received permission to perform digital operations on their behalf can log in, select “Verify invoice details”, and enter the supplier invoice allocation number. The service confirms whether the supplier’s invoice data matches the data reported by the supplier to the Tax Authority.

If an allocation number is invalid, missing, or linked to a held / refused invoice, the buyer must contact the supplier for correction before claiming any VAT deduction.