Israel is implementing a Continuous Transaction Controls (CTC) regime which was initially scheduled to roll out on January 1, 2024. On October 23, 2023, the Israeli Tax Authority (ITA) announced that the timeline has been extended to offer businesses more time to complete their technological development.
According to the announcement, the ITA will allow deduction of input tax from a tax invoice, even in the absence of an allocation number, until March 31, 2024.
The new Israeli invoicing model envisages a clearance system for invoices. Under this new framework, businesses engaged in B2B transactions that exceed a specific threshold will be required to obtain an allocation number. Without this number on invoices they receive, businesses will not be eligible to deduct input VAT.
It is important to emphasize that although the ITA has extended the time for input tax deductions, the clearance platform will be fully operational as originally planned, beginning January 1, 2024. As of this date, invoice issuers who will request allocation numbers, will receive them.
For more detail regarding the new Israeli invoicing model, you can read our blog.
