All About E-Invoicing in Israel

Israel is pioneering a transformative approach to combat tax evasion through its innovative electronic invoicing system. As one of the first countries to implement a comprehensive clearance-based Continuous Transaction Control (CTC) model, Israel is setting new standards for real-time VAT compliance and transparent business transactions.

Beginning in 2024, Israel introduced mandatory B2B e-invoicing with a phased implementation based on invoice values, requiring businesses to obtain allocation numbers through the SHAAM platform before invoices can be legally recognized for VAT deduction purposes. This revolutionary system represents a significant shift from traditional post-audit models to real-time validation, positioning Israel at the forefront of digital tax administration.

Latest News

The Knesset Financial Committee accelerated Israel's e-invoicing thresholds, moving deadlines to January and June 2026:

The Israel Tax Authority released version 2.0 of its technical specs in late 2024, adding new JSON fields, updated web services, and two new document types requiring allocation numbers: Agent Tax Invoice (חשבונית מס סוכן) and Journal Command (פקודת יומן).

Contact our experts to ensure seamless CTC compliance integration.

What Is E-Invoicing and Why Israel Has Adopted It?

E-invoicing represents a fundamental transformation from traditional paper-based processes to structured, machine-readable documents validated in real-time by tax authorities.

The benefits of e-invoicing include cost savings from eliminating paper, printing, and manual processing; increased accuracy through automation; faster invoice processing leading to quicker payments and improved cash flow; and enhanced tax compliance with real-time validation of transactions.

The Evolution of E-Invoicing in Israel

Israel's e-invoicing journey reflects a bold and proactive approach to digital tax transformation:

• 2024: Israel introduced mandatory B2B e-invoicing with the clearance CTC model through the SHAAM platform, initially planned for January 1 but delayed to April 1 due to the state of war, and later postponed to May 5, 2024.
  
  
• January 2024: The pilot period concluded, after which the ITA began applying technical validations to each received JSON file, marking the transition from voluntary to mandatory compliance.
  
  
• March 2025: The Knesset Financial Committee announced accelerated implementation timelines, significantly shortening the phased rollout schedule and reducing thresholds for allocation number requirements.
  
  
• Ongoing Development: Israel continues refining the SHAAM platform with regular technical specification updates, including version 2.0 released in late 2024, introducing new web services and expanded document types requiring clearance.

Continuous Transaction Control (CTC) model

B2G Electronic Invoicing in Israel

Currently, B2G (Business-to-Government) transactions are not included in Israel's mandatory e-invoicing regime. The existing mandate focuses exclusively on B2B transactions, with government procurement processes operating under separate procedures.

Businesses supplying goods or services to Israeli government entities should continue following established procurement and invoicing protocols until potential future expansions of the e-invoicing mandate.

B2B Electronic Invoicing in Israel

Israel's B2B e-invoicing mandate operates under a clearance CTC model via the SHAAM platform to ensure real-time validation of invoices by the Israel Tax Authority (ITA). The phased rollout began on May 5, 2024, initially mandating electronic invoices for transactions exceeding 25,000 NIS. 

The implementation has accelerated with reduced thresholds: mandatory electronic invoicing for invoices above 20,000 NIS started in January 2025; by January 2026, the threshold drops to 10,000 NIS; and by June 2026, it lowers further to invoices above 5,000 NIS.

The system requires all B2B invoices to be pre-approved by the ITA, embedding an official allocation number to qualify for VAT deduction. 

The SHAAM Platform and Allocation Numbers

Israel's e-invoicing is managed via the SHAAM platform, a government system that validates invoices in real-time and issues allocation numbers required for VAT compliance.

An allocation number (מספר הקצאה) is a unique ID given by the Israeli Tax Authority after invoice approval through SHAAM. This number must be included in the e-invoice before sending, proving tax clearance and VAT validity.

To get an allocation number, businesses can:

• Integrate directly via API to SHAAM (for those with strong IT systems)
• Submit invoices manually through the Tax Authority’s web platform (for lower volumes)

Invoices are checked instantly; approved ones receive an allocation number, while invalid ones are rejected.

Version 2.0 of Israel's e-invoicing technical specifications requires invoice data to be submitted in a structured JSON format with specific mandatory fields. 

These requirements help guarantee the security and integrity of the invoicing process under the SHAAM platform system.

B2C E-Invoicing and Fiscalization

In Israel, B2C e-invoicing remains voluntary, but fiscalization requires digital real-time reporting of sales via certified POS systems to the Israel Tax Authority (ITA) for VAT compliance.

Businesses with annual turnover over NIS 100,000 must use fiscal printers or software that generates unique fiscal numbers and sends transaction data instantly to ITA servers. 

How to Send an Electronic Invoice in Israel?

Businesses have two main methods to send electronic invoices through the Israeli Tax Authority’s SHAAM platform:

• API Integration: Suitable for companies with strong IT infrastructure, this method allows automatic submission of invoice data in real-time for instant validation and allocation number issuance. It is ideal for volume invoicing and seamless system integration.

• Manual Submission: Smaller businesses or those without advanced IT systems can manually upload invoice details or fill in online forms via the government’s web platform to obtain the required allocation number for VAT compliance.

Both methods ensure invoices are validated by the tax authority and include a unique allocation number to make them valid for tax purposes.

Handling Cross-Border Electronic Invoices

Currently, cross-border transactions in Israel are not required to follow the e-invoicing and clearance rules that apply to domestic transactions.

Foreign companies invoicing Israeli businesses do not need an allocation number from SHAAM but must follow international invoicing and VAT rules, like proper formats and VAT rules, such as reverse charge or import procedures.

E-Reporting in Israel

In Israel, e-reporting involves businesses submitting VAT returns periodically, monthly or quarterly via the SHAAM platform, covering sales and purchase summaries in a standard filing process.​

The Israel Tax Authority (ITA) uses SAF-T, an XML format with detailed records like ledgers, invoices, and VAT data, provided only during audits from accounting software.​

Unlike real-time fiscalization for POS, e-reporting is periodic with no broad instant clearance requirement.​

Reporting Steps

• Log into SHAAM portal for VAT return filing.
• Input aggregated transaction data; no real-time requirement.
• Prepare SAF-T files on demand for compliance checks

Penalties and Consequences for Non-Compliance

Penalties for not complying with Israel’s e-invoicing rules include denial of input VAT deduction on invoices without valid allocation numbers, causing financial losses and disputes. Invoices rejected by the SHAAM platform must be corrected and resubmitted, leading to delays. 

Failure to implement mandatory e-invoicing or meet technical requirements can disrupt business operations. Not keeping proper records for seven years may result in fines during audits.

Your Trusted Partner for E-Invoicing in Israel

As Israel’s e-invoicing system transforms tax compliance with real-time validation via the SHAAM platform, partnering with trusted providers such as our platform, DDD Invoices, is key to navigating this advanced landscape effortlessly. 

Israel’s advanced e-invoicing framework establishes a global standard for efficient and modern VAT compliance. Partnering with us allows your business to concentrate on growth while ensuring full and accurate adherence to all regulatory requirements.

FAQs

When did mandatory B2B e-invoicing start in Israel?

Mandatory B2B e-invoicing began on May 5, 2024, for invoices over 25,000 NIS. The system follows a phased implementation plan with thresholds decreasing over time, most recently accelerated through March 2025 Knesset announcements to reach 5,000 NIS by June 2026.

What is an allocation number and why is it important?

An allocation number (מספר הקצאה) is a unique identifier issued by the Israeli Tax Authority through the SHAAM platform after validating an invoice. This number is essential because buyers can only deduct input VAT from invoices containing valid allocation numbers, making it critical for both supplier payment and buyer compliance.

Is e-invoicing mandatory for all business transactions in Israel?

No, the mandate applies only to domestic B2B transactions above specified value thresholds. B2G (Business-to-Government), B2C (Business-to-Consumer), and cross-border transactions are currently excluded from the mandatory e-invoicing requirements.

What formats does Israel accept for e-invoicing?

Israel requires invoice data to be submitted in JSON format according to ITA technical specifications. The system uses the clearance CTC model rather than accepting various invoice formats, with validation occurring before invoices are finalized and delivered to buyers.

Can foreign companies invoice Israeli businesses electronically?

Foreign suppliers are not currently required to use the Israeli e-invoicing system or obtain allocation numbers for invoices to Israeli businesses. Cross-border transactions follow standard international invoicing procedures, though this may change as the system evolves.

What happens if I don't comply with e-invoicing requirements?

Non-compliant invoices cannot be used for VAT deduction, creating immediate financial consequences for buyers and potential payment delays for suppliers. Systematic non-compliance may result in audit scrutiny, penalties, and business relationship difficulties.

How long must e-invoices be archived in Israel?

E-invoices must be securely stored for seven years in accordance with Israeli tax law, providing complete audit trails and ensuring accessibility for compliance verification and dispute resolution purposes.