20 February 2024
As per the latest reports, Israel will most likely announce a one-year delay in its mandatory B2B pre-clearance e-invoicing implementation. The Internal Revenue Service is expected to postpone the planned April 2024 implementation for B2B e-invoicing – Israel Invoices; a new timetable will be announced for 2025. The delay, thereby, allows businesses more time to prepare. This delay comes as a strategy for tackling fictitious invoice frauds, often used by criminals for money laundering.
Pre-clearance model to combat fictitious VAT invoices
The pre-clearance model aims at tackling the vast fraudulent challenges around fictitious B2B VAT invoices, used by organisations as deductions against their VAT liabilities. The tax authorities of Israel believe that these fraudulent issues result in heavy losses in revenues. Therefore, by implementing a pre-clearance model, tax authorities will have the upper hand to cross-check any submitted invoice with the original supplier’s records.
The new requirement for obtaining a unique digital sales invoice number (Allocation number) from Israel’s Ministry of Finance before issuing an e-invoice will be for a one-year pilot period. This includes confirming the requirements for using certified representatives to obtain approved sales invoice numbers.
The initial timeline for implementation
Originally, the ministry proposed a 5-phased introduction of the threshold for eligible invoices, which organisations must submit to the tax authorities in real time to validate and allocate the unique digital invoice number. The initially planned 2024 timeline was –
- January 2024 – voluntary
- April 2024 – above NIS 25,000 (approx. €6,250 or USD 6,710)
- Jan 2025 – above NIS 20,000
- Jan 2026 – above NIS 15,000
- Jan 2027 – above NIS 10,000
- Jan 2028 – above NIS 5,000 (approx. €1,300 or USD 1,600)
However, with the possibility of a one-year delay, this timeline will also get pushed back. We await the announcement of the same from the government of Israel. Stay tuned with us for more updates on the same!
