How to choose the right solution for Israel's new E-Invoicing requirement

General

As part of the plan to reduce the use of fictitious invoices, the Tax Authority will operate a digital control system on transactions between dealers, by assigning confirmation numbers to invoices at the time of their issuance. In accordance with the approved plan, at the beginning on January 1, 2024, the Tax Authority will assign a unique number online to tax invoices whose value exceeds NIS 25,000. The threshold will decrease in the subsequent five years, so by January 1, 2028, the threshold will be NIS 5,000.

Allocation numbers can be obtained by contacting the designated service via the invoice issuer's API. Those who use manual invoice books will be given the option to receive an allocation number in the ITA's designated application, by typing in the invoice details.

*** Update October 23, 2023

In light of the security situation in Israel, the Tax Authority will allow deduction of input tax from a tax invoice even without an allocation number until March 31, 2024.

More details in the link.

***

Disclosure obligation

The disclosure obligation applies when four of the following conditions are met:

1. The invoice amount before vat is greater than:

   1. In 2024 – the amount before vat is greater than NIS 25,000 (during the pilot period).

   2. In 2025 – the amount before vat is greater than NIS 20,000.

   3. In 2026 – the amount before vat is greater than NIS 15,000.

   4. In 2027 – the amount before vat is greater than NIS 10,000.

   5. In 2028 – the amount before vat is greater than NIS 5,000.

2. The invoice includes a non-zero vat component.

3. The customer is a "licensed dealer".

4. The customer has requested an allocation number.

At the same time, an allocation number may be requested for any invoice, for any amount and for any customer.

For more details:

https://www.gov.il/BlobFolder/generalpage/hor-software-other/he/IncomeTax_software-houses-en-040723.pdf

SAP Israel Localization solution

According to publication by SAP (Mandatory B2B electronic invoices in 2024), SAP has initiated a development process and is planning to provide a solution for this new regulation in the second half of Q4 2023. The exact date will be announced as soon as all necessary technical details are established.

SAP’s solution to support electronic document processing and statutory reporting requirements globally is SAP Document and Reporting Compliance (SAP DRC).

The SAP Document and Reporting Compliance solution is supported in SAP ERP, SAP S/4HANA, and SAP S/4HANA Cloud for the new e-invoicing regulation for Israel, covering FI and SD as source documents.

In SAP ERP, the following minimum SP levels are necessary:

• SAP ERP 6.0 Enhancement Package 6 SP12, Enhancement Package 7 SP05, Enhancement Package 8 (no minimum SP level).

• In SAP S/4HANA, the minimum release is 1709.

Allegro's advise how to choose the right solution for Israel's new E-Invoicing requirement

For more details you are invited to contact us by email info@allegropro.co.il

or phone +972 52 6509010