ITA e-invoice mandate in Israel
Phased Israel Tax Authority rollout from May 2024 — allocation numbers, CTC clearance and the path from ILS 25,000 to 5,000.
The Israel Tax Authority (ITA — Rashut HaMisim) launched a phased mandatory e-invoice clearance regime on 5 May 2024 under ITA Directive 1480/24. The model is continuous transaction control (CTC): every B2B invoice above the threshold must be submitted to the ITA in real time, which returns an allocation number (mispar hatzaa) before the supplier may deliver the document to the buyer. Without a valid allocation number on the face of the invoice, the buyer cannot deduct input VAT. The threshold opened at ILS 25,000 (net of VAT) per invoice in 2024, dropped to ILS 20,000 in 2025 and is scheduled to fall to ILS 5,000 by 2028, eventually covering substantially all B2B invoicing and selected B2G flows.
- ITA (Rashut HaMisim): central tax authority, headquartered in Jerusalem.
- Directive 1480/24: legal basis for the allocation-number mandate.
- Allocation number (mispar hatzaa): 9-digit ITA-issued ID per invoice.
- Threshold path: ILS 25,000 (2024) → 20,000 (2025) → 5,000 (2028).
How it works
Register the supplier company with the ITA as an Osek Murshe (registered VAT dealer). The Mispar Osek (VAT/dealer ID) is the 9-digit number used across all e-invoice payloads. Sole traders below the Osek Patur threshold are outside the mandate but may still opt in to issue valid invoices to Osek Murshe buyers.
Issue each B2B invoice above the current threshold from accounting or invoicing software that connects to the ITA web service. The payload includes supplier Mispar Osek, buyer Mispar Osek, invoice total net + VAT, line items and a request for an allocation number — submitted before the document is delivered to the buyer.
Receive the allocation number from the ITA in real time and print it on the invoice (printed copy, PDF and any electronic representation). Without a valid allocation number, the document is not a valid tax invoice in Israel and the buyer cannot recover the 17% input VAT.
Deliver the cleared invoice to the buyer via any agreed channel — email PDF, EDI, customer portal. The ITA does not act as a postman: clearance only validates the allocation number, while delivery remains the supplier's commercial responsibility under the Commercial Wrongs Law and the contract.
Reconcile monthly with the VAT return (form 874/836) filed with the ITA. From 2025 the ITA cross-checks reported VAT against allocation numbers issued — gaps trigger automated queries. Keep invoices, allocation logs and reconciliation evidence for at least seven years per the Income Tax Ordinance.
Legal framework
- ITA Directive 1480/24 on allocation numbers for invoices.
- Value Added Tax Law 5736-1975 (Chok Mas Erech Mosaf).
- Income Tax Ordinance (New Version) 5721-1961.
- Economic Efficiency Law 2023 (e-invoice clearance baseline).
Frequently asked questions
Is the ITA e-invoice mandate compulsory for every Israeli business?
Not yet for every business. Since 5 May 2024 it has been compulsory for B2B invoices above the threshold issued by Osek Murshe dealers. Osek Patur (exempt) dealers are currently outside scope, and B2C retail is unaffected. As the threshold drops to ILS 5,000 by 2028, coverage approaches every commercial B2B invoice. Selected B2G flows (central government suppliers) are also in scope.
What happens if I issue an invoice above the threshold without an allocation number?
The buyer cannot recover the 17% input VAT — making them very unlikely to pay you the VAT component. The ITA may also assess penalties under the VAT Law for non-compliant tax invoices and disallow your reported output. Practically every Israeli accounting platform now blocks B2B invoices above the threshold from being issued without first calling the ITA endpoint.
How is the allocation number formatted and validated?
It is a 9-digit numeric identifier issued by the ITA per cleared invoice. It must appear on the printed invoice, in any PDF copy and in the structured XML/JSON payload. The buyer's accounting software can re-validate the number against the ITA's API to confirm it matches the supplier, total and date — protecting the buyer from invoice fraud or recycled numbers.
How long must I retain invoices and allocation logs?
At least seven years from the end of the tax year, per the Income Tax Ordinance and the VAT Law record-keeping rules. The retention must preserve integrity and readability: the XML/JSON payload, the allocation number, the ITA acknowledgement and the PDF copy delivered to the buyer. 4invoices stores all four artefacts automatically and re-presents them on demand to the ITA.
Is Israel a member of the Peppol network?
No. Israel runs its own centralised CTC model via the ITA — closer to Italy's SDI or South Korea's NTS than to the European Peppol four-corner network. Israeli exporters who sell B2B into the EU will need to issue EN16931 UBL alongside the local ITA clearance once the EU's ViDA regulation becomes mandatory in 2028. 4invoices emits both formats in parallel.