Israel's B2B e-invoicing mandate reaches final phase with NIS 5,000 threshold
Israel's e-invoicing clearance mandate entered its final implementation phase on June 1, 2026, lowering the invoice-value threshold to NIS 5,000 (about €1,450). Suppliers must now submit key invoice data to the tax authority for clearance before issuing invoices to buyers.
Israel’s B2B e-invoicing mandate reached its final scheduled phase on June 1, 2026, with the invoice-value threshold reduced to NIS 5,000 before VAT. The clearance model requires suppliers to submit invoice data to the Israel Tax Authority, receive an Allocation Number, and include it on the tax invoice. No further threshold reductions have been announced.
Israel’s e-invoicing mandate entered its final implementation phase on June 1, 2026, expanding clearance requirements to a broader range of B2B invoices. The reform is designed to combat fictitious invoices and VAT fraud by giving the tax authority control over key invoice information through a central system.
Progressive rollout based on invoice value
Unlike most countries that phase in e-invoicing mandates by company size or annual turnover, Israel lowered the applicable invoice-value threshold at each stage, gradually expanding the number of B2B transactions in scope:
- May 5, 2024: invoices above NIS 25,000 before VAT (approximately €7,250)
- January 1, 2025: threshold reduced to NIS 20,000 (approximately €5,800)
- January 1, 2026: threshold reduced to NIS 10,000 (approximately €2,900)
- June 1, 2026: threshold reduced to NIS 5,000 before VAT (approximately €1,450)
The June 2026 milestone represents the final scheduled reduction. Invoices valued at NIS 5,000 or less remain outside the Allocation Number requirement. No further reduction has been announced, though future extensions cannot be ruled out.
How the clearance model works
Israel’s approach differs from e-invoicing regimes that require suppliers to transmit complete invoices in a prescribed structured format. Instead, the supplier must first submit key invoice data to the Israel Tax Authority and request an Allocation Number. Once the ITA accepts the data, it issues this unique number, which must be associated with the tax invoice.
The customer can then verify the invoice data against the information reported to the ITA to secure their right to deduct input VAT. Importantly, Israel does not mandate a structured format for the commercial invoice exchanged between supplier and customer. After clearance, the invoice can be exchanged in PDF, paper, or another electronic format, as long as it includes the Allocation Number.
Two years after the progressive rollout began, the Israel invoice model now covers a significant volume of B2B transactions. Businesses are now expected to meet the requirement as part of normal operations.