Israel e-Invoicing Guide

Israel has adopted a clearance model for e-invoicing, requiring businesses to obtain an allocation number from the Israel Tax Authority (ITA) before an invoice is considered legally valid. The system is designed to combat fictitious invoices (tax fraud) by ensuring every invoice is pre-approved by the tax authority.

The mandate is being phased in by invoice value threshold. It uses a JSON-based API with OAuth2 authentication for secure communication with the ITA. Israel's approach is focused on B2B transactions, with the system gradually expanding to cover invoices of lower values.

Israel's e-invoicing system launched in May 2024 for invoices above ILS 25,000. The threshold dropped to ILS 20,000 in January 2025, then to ILS 10,000 in January 2026. A further reduction to ILS 5,000 is scheduled for June 2026. The original five-year rollout plan has been compressed to roughly two years.

All businesses issuing invoices above the current threshold must request an allocation number from the ITA before the invoice can be issued to the buyer. The request is made via the ITA's secure REST API using OAuth2 authentication.

Invoices below the threshold are exempt. B2G and B2C transactions are not currently covered by the allocation number requirement. Businesses must integrate their invoicing systems with the ITA API to request and receive allocation numbers in real-time.

Israel operates a pre-clearance model through the SHAAM platform. Before issuing an invoice, the seller's system sends a request to the ITA via API containing the invoice details. The ITA validates the request and returns a unique allocation number. This number must appear on the invoice before it is delivered to the buyer.

The system uses JSON format over a secure REST API with OAuth2 for authentication. The allocation number serves as proof that the ITA has approved the transaction, making it extremely difficult to issue fictitious invoices for tax credit fraud. Businesses can also submit via a web portal for lower volumes.

Invoices issued without a valid allocation number (where required) have no legal standing for VAT deduction purposes. The buyer cannot claim input tax credit on invoices that lack the ITA allocation number. Additional penalties may apply for repeated non-compliance or attempts to circumvent the system.