The government of Israel plans to implement a phased Continuous Transaction Control (CTC) model for B2B e-invoicing as part of its economic plan for 2023-2024.

Timeline

From January 1, 2024, the Israeli Tax Authority will assign invoice confirmation numbers. This confirmation number will be required for purchasers to deduct the VAT charged. There will be a phased approach using the following timeline and thresholds:

• 2024 – invoices above NIS 25,000 (≈7000 USD)
• 2025 – invoices above NIS 20,000 (≈ 6153 USD)
• 2026 – invoices above NIS 15,000 (≈ 4615 USD)
• 2027 – invoices above NIS 10,000 (≈ 3077 USD)
• 2028 – invoices above NIS 5,000 (≈1400 USD)

Impact

The implementation of e-invoicing aims to prevent the use of fake invoices, thereby combating tax fraud and evasion.

Businesses operating in Israel should start getting ready for the forthcoming mandatory e-invoicing regulation. Business should assess their current IT systems, ERP (Enterprise Resource Planning) systems, and tax compliance processes to ensure they are aligned with the new requirements for e-invoicing in Israel.