Israel’s Electronic Invoicing Progress
Israel’s electronic invoicing journey has progressed significantly since the initial announcements in early 2023. We have been closely monitoring and analysing the unfolding developments in Israel's tax landscape, so that you have the most up-to-date information.
This article was last updated on 18 July 2025 to reflect the recently confirmed accelerated timeline for the rollout.
The 2024 pilot phase was successfully completed as planned, and the 2025 first mandatory phase, which lowered the invoice threshold to NIS 20,000, is currently underway. The Israel Tax Authority (ITA) remains on track with its implementation.
In addition, on 17 March 2025, the ITA announced the approval of the Knesset Finance Committee for further consideration of various tax measures to reduce black money, which include proposals to significantly adjust the timing of the invoice value threshold. This will accelerate the completion of the roll-out, with the threshold being lowered to NIS 10,000 before VAT on 1 January 2026 (instead of the originally planned date of 2027), and further lowered to NIS 5,000 before VAT on 1 June 2026 (instead of 2028).
The following content provides a historical overview of the initial announcements and expected timelines as of July 2023. For the most current and comprehensive information on Israel's e-invoicing regime, please refer to our updated blog post here.
February 2023: First hints of Israel’s e-invoicing intentions
In February 2023, the Israeli Ministry of Finance announced its intention to introduce a CTC-based electronic invoicing (e-invoicing) regime.
The proposed system aims to prevent fictitious invoices and ensure fair competition between tax-compliant businesses. The regime requires real-time approval from the Tax Authority for business-to-business (B2B) invoices exceeding NIS 5,000.
While the announcement was significant for the country, further administrative and operational hurdles, such as further readings and approvals of the budget document, amendments to the VAT Law and publication of technical details, required resolution before any implementation could take place.
May 2023: A gradual rollout plan
In May 2023, the Israeli Tax Authority shared more details of their plan.
The high-level timeline was presented with a start date of 1 January 2024, for invoices above NIS 25,000 (~ EUR 6,100). The threshold plans to gradually decrease, eventually reaching NIS 5,000 by June 2026 (expedited from an original target date of January 2028). However, there were still questions about the operational and technical aspects of the proposed system.
July 2023: Clarification and a voluntary start
Recently, the Israeli Tax Authority (ITA) published the "Israel Invoice Model Description - API's" document. This document sheds light on the intricate aspects of Israel's e-invoicing plan, providing software service providers and businesses with useful, valuable insights.
Expected timelines
The e-invoicing initiative began with a pilot phase from 1 May 2024 to 31 December 2024. These dates may be extended by an additional year, which will ultimately be decided by the Finance Committee.
The rollout will then continue as follows:
2024: Invoices with a net amount (before VAT) above NIS 25,000
2025: Invoices with a net amount above NIS 20,000
2026 - January: Invoices with a net amount above NIS 10,000 (originally planned for 2027)
2026 - June: Invoices with a net amount above NIS 5,000 (initially planned for 2028)
Expected initial scope
The electronic invoicing’s initial scope will apply the following:
VAT-registered businesses exclusively.
Only B2B transactions, including invoices and credit notes.
Only taxable invoices; cross-border invoices are excluded from the scope.
Expected invoice transmission process
During the initial phases of implementation, the invoice issuance process may involve the following:
Initially, only header-level data may be required, while line-level detail may not be necessary.
The transmission process is expected to be in real-time.
Following submission, the Tax Authority will issue approval or rejection, providing an allocation number for approved invoices. This allocation number must be added to the invoice and must be included in the VAT report. A user-friendly interface will be available for the receiver to validate the allocation number.
The responsibility of distributing invoices outside the Tax Authority lies with the issuer. In PDF format (with digital signature) or on paper, invoices must include the previously received allocation number. Although electronic exchange is possible, it may not initially be recognised as a valid replacement for traditional hard copies or signed PDFs.
Please note that the following "Looking Ahead" section reflects the information available as of July 2023. For the latest updates, please see our updated blog post here.
Looking ahead
As Israel embarks on their groundbreaking e-invoicing journey, we are dedicated to keeping you informed and well prepared for the changes ahead by providing you with timely updates and actionable insights. We believe this development has the potential to significantly impact businesses operating in Israel.
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