Israel starts invoice allocation numbers at a NIS 25,000 threshold for 2024

What changed in detail

Israel’s Economic Efficiency Law (Legislative Amendments to Achieve the Budget Targets for the 2023 and 2024 Budget Years), 5783-2023, was published in Sefer HaChukim 3045 on 31 May 2023. Section 38 (VAT Law amendment no. 63, enacted as a temporary provision) created the allocation-number model: input VAT on a tax invoice above a threshold, measured before VAT, cannot be deducted unless the invoice carries an allocation number issued by the Israel Tax Authority.

The base threshold written into the VAT Law is NIS 5,000. Section 38(c) overrides it for 1 January 2024 to 31 December 2024: section 38(a1) is read with “25,000” in place of “5,000”. The same subsection also disapplies, for that year, the provisions that would let the Director refuse an allocation number. 2024 was therefore a pilot year in which numbers were requested and issued but not refused.

The statute set 1 January 2024 as the start. The Tax Authority’s system went live on that date. Because of the war, mandatory use was deferred administratively to 5 May 2024, by a decision taken at the Minister of Finance. The Tax Authority’s representative described this to the Knesset Finance Committee on 20 November 2024. No statute or order moved the date.

What it means

This threshold is spent. The NIS 25,000 figure applied only to 2024. It was followed by NIS 20,000 for 2025, NIS 10,000 from 1 January 2026 and NIS 5,000 from 1 June 2026, which is the current threshold.

The point most often misread is the start date: the law ran from 1 January 2024, while 5 May 2024 was the date the Tax Authority began enforcing it. For 2024 invoices dated before 5 May, a missing allocation number was not treated as blocking the deduction in practice, but the statutory period itself began on 1 January.