Since June 1st 2026, Israel’s B2B e-invoicing reform has reached its latest implementation stage [↗︎], designed primarily to combat fictitious invoices and VAT fraud by allowing the tax authority to control key invoice information through its central system.
Two years after the progressive rollout began, the Israel invoice model now covers a significant volumes of B2B transactions. No further implementation phase has been announced to date, and businesses are now expected to meet the requirement as part of normal operations.
A progressive implementation based on value of individual invoices
Unlike the approach adopted in many other countries, where e-invoicing mandates are typically phased in based on company size or annual turnover, Israel introduced its obligation progressively based on the value of individual invoices, before VAT, lowering the applicable invoice-value threshold at each stage and thereby gradually expanding the number of B2B transactions in scope :
- 5 May 2024: invoices above NIS 25 000 before VAT (~ € 7,250)
- 1 January 2025: threshold reduced to NIS 20 000 (~ € 5,800)
- 1 January 2026: threshold reduced to NIS 10 000 (~ € 2,900)
- 1 June 2026: threshold reduced to NIS 5 000 before VAT (~ € 1,450)
The June 2026 milestone therefore represents the final scheduled reduction of the threshold, expanding the number of B2B invoices falling within the regime and leaving only lower-value invoices of NIS 5 000 or less outside the Allocation Number requirement.
While NIS 5 000 currently represents the final threshold, its relatively high value means that a significant population of lower-value invoices remains outside the mandate. No further reduction has been announced to date, although future extensions of the regime cannot be ruled out.
Invoice format and clearance transmission model
The Israeli model differs from e-invoicing regimes requiring the supplier to transmit the complete invoice to the buyer in a prescribed structured format.
For an invoice within scope, the supplier must first submit key invoice data to the Israel Tax Authority (ITA) and request an Allocation Number, as is typical in a “Clearance” model.
Once accepted, ITA issues this unique Allocation Number, which must be associated with the tax invoice. This number enables the customer, upon reception of the invoice, to secure its right to deduct input VAT by verifying that the invoice data corresponds to the information reported to the ITA.
Importantly, Israel does not impose a mandatory structured format for the invoice exchanged between supplier and customer. After it has been “cleared”, the commercial invoice can still be exchanged between the parties in their chosen format, including PDF, paper or another electronic format, as long as it includes the ITA.
