Short answer: Since June 1, 2026, every B2B tax invoice in Israel above NIS 5,000 before VAT needs an allocation number from the Israel Tax Authority before it is issued, and without it the buyer cannot deduct the input VAT. Companies that invoice from an ERP, a billing engine or custom code must request it through the Tax Authority's API; the hard part is handling denials, outages and expiring credentials without blocking sales.
Key takeaways
- The threshold keeps falling: NIS 25,000 in May 2024, 20,000 in 2025, 10,000 in January 2026 and 5,000 since June 1, 2026, all before VAT, under the December 2025 regulation.
- The buyer carries the risk: a customer's input VAT deduction is conditional on the number appearing on the invoice, so customers reject invoices without one.
- Clearance comes before issue: the number is requested and validated before the invoice is final, and the Authority reviews requests in real time and can refuse irregular ones.
- The manual portal does not scale: a web portal exists, but for real invoice volume an API integration is the practical route.
How the allocation number flow works
The supplier's system sends the invoice details to the Tax Authority and receives a unique allocation number, printed on the invoice. Access is set up once: an authorized officer registers the business for the Authority's digital services, an organization and an app are created on the Authority's developer portal to obtain an API key and secret, and the billing system then authenticates with OAuth 2.0. Integration guides note that the refresh token expires after 90 days, a classic cause of silent failures months after go-live.
Major Israeli ERPs and invoicing tools ship this built in. The gap is homegrown billing, marketplace backends and older ERP versions, the situation covered in this guide to connecting Priority ERP to modern services.
Where integrations break
Most failures are not in the API call but around it.
| Failure point | What happens | Engineering fix |
|---|---|---|
| Token expiry | Requests start failing weeks after launch | Scheduled token refresh plus an alert before expiry |
| Authority outage or timeout | Invoices stuck as pending | Queue requests, retry with backoff, never finalize an invoice without a number |
| Denied request | No number for an irregular invoice | Route to finance with the reason; options include cancelling or requesting a hearing |
| Duplicate requests | Two numbers for one invoice after a retry | Idempotent requests keyed to the internal invoice ID |
