E-Invoicing in Israel

Last update: 2026, September 29

Summary

Israel operates a countrywide e-reporting mandate based on a Clearance model. Qualifying tax invoices above the applicable threshold must be validated by the tax authority and assigned an allocation number, allowing the recipient to deduct input VAT.

B2G & B2B Transactions

Partially mandatory e-reporting (clearance)

For tax invoices above 5,000 NIS (around €1,500) issued to “authorised VAT dealers”, clearance through the central SHAAM platform is required, while delivery remains unregulated and may take place in any format.

B2C Transactions

No e-invoicing obligation

No e-invoicing or e-reporting obligation applies to business-to-consumer transactions in Israel.

What the Law Says

B2G & B2B E-Reporting

Israel operates a nationwide e-reporting mandate for qualifying tax invoices, revolving around the SHAAM central platform.

The obligation was introduced by the Economic Efficiency Law for the 2023–2024 Budget Years, which amended the Israeli VAT framework to make the presence on the invoice of an allocation number a condition for the recipient to deduct input VAT.

The mechanism follows a clearance model, where the invoice issuer must submit the required invoice data to the central SHAAM platform, either through an API in JSON format or manually through the government web portal.

Once validated, the Israel Tax Authority (ITA) issues an allocation number, which must appear on the tax invoice. After this clearance step, the supplier may send the invoice to its customer in any format, including paper, PDF or an electronic invoice.

The requirement depends on two conditions. First, it applies only to invoices issued to authorised VAT dealers, a status that does not apply to every company or public administration. Suppliers should therefore confirm their customer’s VAT status before determining whether clearance through SHAAM is required.

Second, the invoice amount before VAT must exceed the applicable threshold. The threshold was progressively lowered in four phases following the introduction of the mandate. It has stood at NIS 5,000 (~€1,500) since June 1, 2026. No further reduction is currently planned, and invoices below this threshold do not require clearance through SHAAM.

Invoices must generally be archived for seven years.

B2C E-Invoicing

Israel does not have a B2C e-invoicing or e-reporting mandate.

Companies may continue to issue business-to-consumer invoices and receipts through their usual channels, including paper invoices, PDF invoices sent by email and printed receipts.

Timeline

Invoice clearance mandate phase 1

All businesses must clear their qualifying invoices > 25,000 NIS through the SHAAM central platform before delivery

Phase 2 & end of grace period

Qualifying invoices threshold lowers to 20,000 NIS, and the initial grace period meets its term.

Invoice clearance mandate phase 3

Qualifying invoice threshold for mandatory invoice clearance lowers to 10,000 NIS.

4th and final phase of the mandate

All qualifying invoices > 5,000 NIS must be cleared through the SHAAM central platform.

May 5, 2024

January 1, 2025

January 1, 2026

June 1, 2026

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Technical Details (B2B & B2G)

Israel requires qualifying tax invoices to be cleared, but does not require them to be delivered electronically. Where the obligation applies, the issuer must obtain an allocation number before the recipient can deduct the related input VAT.

Accessing SHAAM and granting authorisation

An invoice issuer must be able to access the SHAAM central platform in order to request allocation numbers.

An authorised VAT dealer may submit requests directly through the government web portal or authorise an employee, representative or service provider to act on its behalf.

Businesses do not need to build a direct technical connection to SHAAM. However, software companies wishing to use the SHAAM API must complete the separate official connection procedure [↗︎], which includes specific registration, confidentiality and security requirements.

Checking the customer’s VAT status

To determine whether clearance through SHAAM is mandatory, the supplier must first confirm that its customer is registered as an authorised VAT dealer. This is one of the conditions for the requirement to apply, alongside the applicable invoice threshold.

Not all private or public entities are authorised VAT dealers. Many fall under other VAT statuses, including:

An exempt VAT dealer, which is registered for VAT but cannot charge VAT or deduct input VAT.
A public institution for VAT, which is a separate VAT status for the public sector.

Invoices issued to such customers do not fall within the obligation. Notably, public entities should not automatically be treated as authorised VAT dealers.

The supplier must therefore check its customer’s VAT status beforehand through the official VAT register [↗︎], using the recipient’s VAT number, and determine whether the mandate applies.

Invoice clearance

In practice, qualifying invoices must be cleared through the SHAAM central platform, which can be accessed either via API (mostly for software providers) or through a government web portal (which means manual input).

Companies issuing large volumes of invoices will generally benefit from working with software providers to automate the process. However, since these providers are not officially certified by the Israel Tax Authority, no public registry exists, meaning companies must independently select their preferred solution.

Invoice details submitted via API must be transmitted in JSON format and include key details, such as:

The customer’s authorised VAT dealer number
The amount before VAT
The VAT amount
The invoice number on which the allocation number will be written

Once validated, SHAAM returns an allocation number, which must appear on the invoice and serves as proof of clearance. In any case, the related VAT cannot be deducted by the invoice recipient until the allocation number is obtained.

Although not mandatory, companies may also voluntarily submit credit notes and invoices below the threshold for clearance. An allocation number can also be requested retroactively, within 6 months of the invoice issuance.

Invoice delivery

As is typical with a clearance model, the mandate does not regulate how qualifying invoices must be delivered to recipients. Companies are free to exchange invoices in any mutually agreed format, whether electronic, PDF or paper-based.

Regardless of the chosen format, the invoice must include the allocation number, which confirms that the invoice data have been cleared and is required for the recipient to deduct input VAT.

Recipients can verify the allocation number and the related invoice data through the Israel Tax Authority’s official verification service [↗︎].

The Invoicing Hub Word

Israel

From a technical perspective, Israel operates a relatively standard clearance-based e-reporting model: invoice data are submitted to a central platform, which returns a unique identifier, the allocation number. This number must appear on the invoice for the recipient to deduct the related input VAT.

What sets Israel apart is its decision to set the threshold not by annual company turnover, but by individual invoice amount. The final threshold remains relatively high, at close to €1,500.

This approach appears intended to reduce the burden on businesses by excluding a large number of low-value invoices. It also allows the tax authority to focus its controls on higher-value transactions, covering a substantial share of VAT exposure without requiring clearance for every invoice.

Yet, this means that companies issuing large volumes of low-value invoices remain outside the mandate, despite being among those that could gain the most efficiency from e-invoicing. Conversely, small businesses issuing only a few high-value invoices have been affected since the first phase of the mandate and therefore had less time to adapt.

Moreover, because the mandate only regulates clearance and not invoice delivery, most companies are likely to continue using paper or PDF invoices. These formats remain prone to long processing times and manual errors, limiting the potential for automation.

Still, this represents a first step. Time will tell whether Israel extends the scope of its framework and moves towards a more complete e-invoicing model.