Credit invoice in Israel: when and how to issue one
A credit invoice (cheshbonit zikuy) corrects a tax invoice already issued.
A credit invoice (cheshbonit zikuy) reduces or cancels a tax invoice already issued. Use it for returned goods, a price reduction or a cancelled sale. It refers to the original invoice and reverses the matching amount and VAT. Do not edit or delete the original invoice.
- Use it for returns, discounts and cancellations after issue.
- Refer to the number and date of the original tax invoice.
- Show the amount and VAT being reversed.
- Keep the original and the credit invoice together.
How it works
Identify the original tax invoice and the reason for the correction.
Create a separate credit invoice with its own sequential number and the date of issue.
Refer to the original invoice number and show the net amount, the VAT at the original rate and the total being credited.
Send it to the buyer, who adjusts input VAT accordingly. Your VAT report reflects the reduction, as your accountant advises.
Check current ITA guidance on whether an allocation number is needed for credit documents. This page does not confirm a rule.
Legal framework
- Value Added Tax Law 5736-1975.
- Israel Tax Authority guidance on tax documents.
Frequently asked questions
When should I issue a credit invoice?
When a tax invoice already issued needs to be reduced or cancelled, for example after a return, a discount or an error found later.
Can I just edit the original invoice?
No. Keep the original as issued and correct it with a credit invoice that refers to it.
Does a credit invoice change VAT?
Yes, it reverses the VAT that belongs to the credited amount. How to report it in the VAT return is a question for your accountant or the Israel Tax Authority.
Does 4invoices file credit invoices with the Israel Tax Authority?
No. 4invoices does not connect to the Israel Tax Authority. You can create a document with lines and VAT rates, including a negative amount if your process needs it, and download the PDF. It does not apply the authority's rules for you.