What is Israel's mandatory e-invoicing allocation system?
Effective: 2024-05-05 · Authority: ITA (Israel Tax Authority)
Israel's Tax Authority (ITA) introduced mandatory e-invoice allocation numbers (Esor) from May 2024 for invoices above ILS 25,000. The system requires businesses to request an allocation number from the ITA before issuing qualifying invoices. Buyers cannot claim input VAT without an allocation number. The threshold will be progressively lowered.
How does the Israeli invoice allocation system work?
Suppliers transmit invoice data to the ITA API before issuing the invoice. The ITA validates supplier and buyer VAT registration, supply amount, and returns an allocation number valid for the specific transaction. The allocation number must appear on the invoice. Buyers verify allocation numbers before claiming input VAT.
Frequently Asked Questions
- What is the transaction threshold for Israeli e-invoice allocation?
- From May 2024, invoices above ILS 25,000 require an allocation number. The threshold will decrease to ILS 20,000 in 2025, ILS 15,000 in 2026, ILS 10,000 in 2027, and ILS 5,000 in 2028. The long-term target is to cover all B2B VAT invoices.
- Does the Israeli allocation requirement apply to import invoices?
- The allocation requirement applies to Israeli-issued invoices for domestic supplies. Import invoices from foreign suppliers are not required to have an Israeli allocation number. The requirement targets the domestic B2B VAT invoice lifecycle.
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