Israel Tax Authority to Lower “Israel Invoices” Reform Threshold to NIS 5,000 Starting June 1
The Israel Tax Authority has announced the next phase of its major “Israel Invoices” (Chashboniyot Yisrael) reform. Starting June 1, 2026, the threshold for mandatory online registration of commercial transactions will drop to NIS 5,000. This regulatory update significantly expands the scope of the program, bringing tens of thousands of freelancers, small business owners, and sole proprietors into the digital tracking system—businesses whose transactions previously did not require real-time verification.
The goal of this phased government reform is to completely eliminate the market for fictitious tax invoices. According to the implementation schedule, the system initially monitored only large transactions of NIS 25,000 or more in 2024, and the limit was lowered to NIS 10,000 in January 2026. This latest drop to NIS 5,000 (excluding VAT) effectively puts most standard day-to-day transactions of Israeli small businesses under real-time digital monitoring.
This change reshapes the rules of B2B transactions, as the Tax Authority shifts the financial risk onto the buyers. Starting in June, any transaction exceeding the new threshold that fails to secure a unique digital allocation number (Mispar Haktsaa) from the government system at the time of issue will not be recognized by authorities. For businesses, this means an automatic loss of the right to reclaim VAT input tax and the inability to deduct the transaction as an expense for income tax purposes.
With the launch date approaching, business software providers are seeing an influx of requests for accounting platform updates. Electronic invoicing vendors are wrapping up technical integration with the Tax Authority’s servers to ensure business owners can automatically generate allocation codes without disrupting their daily operations.
