e-Invoicing in Israel: Timeline, Guidelines, Process, and Steps for Implementation

Israel is moving steadily towards digital tax reporting with the phased rollout of mandatory e-invoicing. Under the new clearance model, businesses must issue, transmit, and validate e-invoices through the Israel Tax Authority (ITA) before sharing them with buyers. The e-invoicing implementation began in 2024 and is expanding in stages based on invoice value thresholds, with broader coverage expected by 2025. 

e-invoicing in Israel focuses on enhancing transparency, combating tax fraud, and streamlining VAT reporting processes. Businesses must issue structured invoices in JSON format, obtain real-time approval from the ITA, and embed unique authorisation codes into each invoice. With strict compliance timelines and technical requirements in place, it is critical for companies to understand what e-invoicing is, how the Israel e-invoicing system works, and the necessary steps for smooth integration. This guide offers a detailed look at the timeline, process, e-invoice guidelines, and how businesses can implement Israel e-invoicing successfully.

What is e-Invoicing in Israel?

e-invoicing in Israel is a system where invoices must be generated in a structured JSON format, submitted to the Israel Tax Authority (ITA) for real-time validation, and authorised before they are sent to the buyer. Each e-invoice in Israel must include a unique authorisation number issued by the ITA to be considered valid. The purpose of e-invoicing is to boost tax transparency, minimise fraud, and make VAT reporting more efficient.

e-Invoice Implementation Timeline

Israel’s e-invoicing system is being rolled out in phases, based on the value of B2B transactions. Here’s a quick look at the official implementation schedule:

e-Invoicing Process in Israel

Israel follows a real-time clearance model where e-invoices in Israel must be approved by the Israel Tax Authority (ITA) before being shared with customers. Here’s a step-by-step breakdown:

1. Invoice Generation: Businesses create e-invoices in Israel using their ERP or billing systems, ensuring all mandatory details are included in the required electronic format.
2. Digital Signing: The invoice must be digitally signed using either the company’s own certified signature
3. Transmission to the Israel Tax Authority (ITA): The signed invoice is transmitted electronically to the ITA via a secure API or an authorised e-invoicing provider.
4. Invoice Clearance by ITA: The Israeli Tax Authority (ITA) reviews the invoice details. If everything is correct, they assign a unique clearance number. If there are mistakes, the invoice must be corrected and submitted again.
5. Delivery to the Buyer: After clearance, the validated invoice with the clearance code is shared with the buyer. Only cleared invoices are legally valid.
6. Managing Rejections:
   In case the invoice is rejected, businesses need to quickly fix the errors and resend it to maintain compliance and avoid any processing delays.

e-Invoicing Compliance Guidelines

Israel’s e-invoicing framework follows strict rules to ensure transparency, authenticity, and real-time control. Below are the key compliance requirements:

• Invoice Format: Invoices must be generated in JSON format with all mandatory fields like transaction date, invoice number, issuer and recipient details, and amount excluding VAT.
• Archiving: Electronic invoices must be archived securely for at least 7 years to meet legal requirements.
• Real-time Clearance: Invoices must be transmitted to the Israeli Tax Authority (ITA) in real-time for approval. The ITA assigns a unique allocation number after verifying the data.
• Digital Signature: All e-invoices must carry a secure digital signature, validated by the Tax Authority. Businesses must use certified digital certificates and renew them before expiry.
• Buyer Validation: Once approved, the cleared invoice must be sent to the buyer, who can verify its authenticity using the clearance number or QR code.
• Continuous Transaction Control (CTC): Israel operates under a centralised clearance model to prevent fraud, illegal invoices, and ensure instant approval and tracking of every transaction.

Who Needs to Comply with e-Invoicing in Israel?

As of 2025, only B2B transactions are covered under e-invoicing in Israel. e-invoicing is mandatory for invoices exceeding 20,000 NIS. Businesses must submit invoice details to the Israeli Tax Authority for real-time approval before delivering them to buyers.

Benefits of e-Invoicing in Israel

e-invoicing offers several advantages for both businesses and the government. It aims to simplify processes, strengthen compliance, and improve overall efficiency.

• Cost Benefits: e-invoicing cuts down expenses related to paper, printing, postage, and manual processes, helping businesses save both time and money.
• Improved efficiency: Invoices are processed faster with real-time reporting, leading to quicker payments and better cash flow management.
• Reduced errors: Built-in system checks help lower the chances of manual mistakes, making the invoicing process more reliable.
• Data entry automation: Most information is captured automatically, minimising human input and significantly reducing the risk of errors.
• Better tax compliance: Real-time invoice sharing with the Israeli Tax Authority ensures transparency, discourages fraudulent activity, and strengthens tax collection.

How can ClearTax help a business with e-Invoicing in Israel?

ClearTax makes e-invoicing in Israel simple and compliant with a user-friendly solution:

• Seamless integration: Easily connects with your existing billing, ERP, or POS systems to generate invoices in the Israel Tax Authority-approved JSON format.
• ITA-compliant: Validates invoices in real-time against the Israel Tax Authority (ITA) requirements before submission to ensure smooth clearance.
• Secure storage: Archives all e-invoices safely for the mandatory 7-year period, making them audit-ready and easy to retrieve.
• Smart reminders: Keeps you informed about upcoming compliance deadlines and phased implementation requirements.
• Clearance-ready: Supports real-time transmission to the ITA, allocation number generation, and helps businesses stay fully prepared for Israel’s centralised clearance model.

Conclusion

Israel’s e-invoicing system is changing how businesses manage invoices and tax reporting. Under the new model, B2B invoices must be issued in JSON format, digitally signed, and cleared by the Israel Tax Authority before being sent to buyers. The rollout is phased by invoice value, starting from 25,000 NIS in May 2024 and covering invoices above 5,000 NIS by mid-2026. Businesses must also archive invoices for seven years to stay compliant. ClearTax helps companies manage the entire process, offering easy integration, real-time validation, and secure storage to meet all e-invoicing requirements efficiently.