Israel delays the implementation of the allocation number requirements

The Israeli Tax Authority will allow the deduction of input tax from a tax invoice even without an allocation number until March 31, 2024

Timeline

Israeli Tax Authority permits input tax deduction from invoices without an allocation number until March 31, 2024 (previously December 31, 2023).

Impact

Under the new invoicing requirements, taxpayers must obtain an allocation number from the tax authority when issuing invoices that exceed NIS 25,000 (approximately 6,000 EUR). Without this number, taxpayers will not be eligible to deduct input VAT for those invoices.

While mandatory implementation is delayed until April 2024, taxpayers with the necessary technological development to connect to the tax authorities' API may opt to use the system starting January 2024. This early adoption will allow suppliers and business customers to benefit from a faster VAT refund process.

Businesses should prepare their systems for the upcoming requirements and assess their current processes to ensure they are aligned with the new requirements.