In accordance with the Israeli Tax Authority (ITA) e-invoicing reform, Israel is transitioning to a Continuous Transaction Controls (CTC) model that requires qualifying invoices to be submitted to the tax authority to obtain an allocation number before they can be used for VAT deduction purposes. This initiative aims to reduce VAT fraud and improve tax compliance.
E-invoicing Implementation Timeline in Israel
As per the latest Israel Tax Authority (ITA) specifications, the e-invoicing Israel mandate will be rolled out in phases depending on the invoice amount before VAT, as outlined below:
- From May 2024, the mandate applies to invoices exceeding NIS 25,000.
- From January 2025, the threshold was reduced to NIS 20,000.
- From January 2026, the threshold has been reduced to NIS 15,000.
- The threshold is planned to decrease to NIS 10,000 in January 2027.
- From January 2028, the mandate is expected to apply to invoices exceeding NIS 5,000.
Technical details
After all required validations are completed, the Israeli Tax Authority assigns an Allocation Number to each approved invoice.
To obtain the Allocation Number, invoices must contain the mandatory information required by the tax authority, including:
- Invoice ID
- Invoice type
- Accounting software number
- Issuer VAT Identification Number
- Invoice date
- Payment amount
- VAT amount
- Payment details
After obtaining and including the Allocation Number on the electronic invoice, the supplier sends the invoice to the recipient. Recipients can verify the Allocation Number through the official ITA services.
How Does E-invoicing Work in Israel
Electronic invoices can be submitted either automatically through the official ITA APIs or manually through the government portal.
The API integration supports both test and production environments, allowing ERP systems to automatically request and receive Allocation Numbers during invoice creation.
The manual submission method is intended primarily for small businesses or taxpayers with low invoice volumes that do not use ERP systems.
To access the ITA services, taxpayers must authenticate using the approved digital identification methods supported by the Israeli Tax Authority.
How can SNI help you?
SNI provides an end-to-end Israel e-Invoicing solution that enables organizations to comply with the Israeli Tax Authority (ITA) Continuous Transaction Controls (CTC) requirements.
Our solution supports the complete invoice lifecycle, including invoice creation, data extraction, mapping, XML generation, validation, Allocation Number request, transmission, monitoring, reconciliation, and long-term archiving.
Invoice data is automatically extracted from SAP or other ERP systems, mapped to the required format, validated, and submitted through the official ITA APIs to obtain the Allocation Number before the invoice is issued where required by the regulation.
The solution automatically processes government responses, Allocation Number confirmations, validation results, and document status updates through a centralized monitoring cockpit.
SNI’s invoice reconciliation functionality automatically matches incoming invoices with purchase orders, delivery notes, or other ERP documents. This significantly reduces manual effort, improves processing accuracy, minimizes errors, and accelerates invoice approval and financial processing workflows.
SNI solution integrates with clients’ systems without the need for updates to existing system versions and is independent of SAP versions. SNI’s SAP solution is compatible with SAP ECC 4.7 and higher, SAP ERP, SAP S/4HANA, and SAP Business Technology Platform (SAP BTP). In addition, SNI provides ERP-independent solutions designed to integrate with any ERP system clients may use.
With continuous monitoring of regulatory developments published by the Israeli Tax Authority, SNI helps organizations remain compliant with evolving technical specifications and Allocation Number requirements while minimizing implementation effort and operational risk.