Israel Invoices Above NIS 5,000: Is the Amount Including VAT or Before VAT?
The total payable can exceed the threshold without requiring an allocation number. Here is which invoice amount to check.
An invoice for NIS 5,664 appears to exceed the NIS 5,000 threshold. But if that total consists of NIS 4,800 plus 18% VAT, it does not exceed the threshold. Under the “Israel Invoices” model, you check the amount before VAT, rather than the total payable. The Tax Authority explains this on its service page.
Above NIS 5,000 — before VAT
Since June 1, 2026, an allocation number has been required for input VAT deduction on relevant tax invoices exceeding NIS 5,000 before VAT, issued to customers registered as Israeli VAT dealers. Exactly NIS 5,000 does not exceed the threshold. Threshold and effective date.
Three examples clarify the difference
The following examples are illustrative and assume 18% VAT on the full amount:
| Before VAT | Including VAT | Does the amount exceed the threshold? |
|---|---|---|
| NIS 4,800 | NIS 5,664 | No |
| NIS 5,000 | NIS 5,900 | No — it equals the threshold |
| NIS 5,100 | NIS 6,018 | Yes |
If you only know the total, divide it by 1.18 to obtain the amount before VAT. This calculation applies when the entire transaction is subject to 18% VAT. Tax Authority guidance on the VAT rate.
What should you check before finalizing the invoice?
Check the amount before VAT and whether an allocation number is needed. Digital Invoice lets you track tax components per invoice, helping you use that breakdown during your review. Product information. When the number is required, its absence prevents the customer from deducting input VAT. Tax Authority explanation.
Updated October 1, 2026.