In Israel you issue a tax invoice (חשבונית מס), a combined tax invoice-receipt, a receipt or a credit invoice depending on your VAT status and the moment of payment. Invoices can be in ILS or a foreign currency, but numbering, details and VAT treatment must stay consistent and traceable.
An authorised dealer issues a tax invoice (חשבונית מס) when it supplies goods or services and charges VAT, and a tax invoice-receipt (חשבונית מס קבלה) when payment is received at the same time. A separate receipt (קבלה) confirms payment of an earlier tax invoice. A credit invoice (חשבונית זיכוי) reverses or reduces an earlier invoice.
An exempt dealer issues a receipt, not a tax invoice, and does not show VAT. A transaction invoice or proforma (חשבון עסקה) is a request for payment and is not a tax document, so the customer cannot deduct VAT based on it.
Choosing the correct document at the correct time protects both sides. A tax invoice issued after payment is received, instead of a combined invoice-receipt, can leave the books with a receipt that matches nothing.
Document the numbering policy in writing: which series is used for tax invoices, which for receipts and which for credit invoices, and who may cancel a document. A one-page rule prevents duplicates when two colleagues issue invoices on the same day.
A tax invoice shows the supplier's name, address and VAT file or company number, the customer's details, the date, a description of the supply, the amount before VAT, the VAT rate and amount, and the total. Where an allocation number applies, it is printed as well.
Numbers run in a continuous series for each document type. Gaps need an explanation, such as a cancelled document that is kept and marked, and the series must not be reset arbitrarily.
Keep the language consistent. Invoices in Hebrew or English are both seen in practice, but the details the authority needs must be easy to read and match the registered data.
Israeli businesses regularly invoice in USD or EUR, especially in technology and export. The invoice states the foreign amount, and the books need the equivalent in shekels, converted at the rate specified in the rules that apply, commonly the representative rate published by the Bank of Israel.
Make the rule explicit in your process: which rate, which date. If the invoice date and the payment date fall in different periods, an exchange difference arises and is recorded in the books.
Agree the currency with the customer in the contract. A contract in USD with an invoice in ILS leads to disputes about which rate was used when the payment is short by a few hundred shekels.
For each foreign-currency customer, store the agreed currency and the payment terms in the customer record, so that the invoice shows the same data each time and the sales team cannot change the currency by accident.
A tax invoice that contains an error is not erased; it is corrected through a credit invoice and, where needed, a new invoice. The credit invoice refers to the original number, so an auditor can follow the chain.
Returns, discounts granted afterwards and cancelled services also go through credit invoices. Each reduces the VAT reported in the period in which it is issued.
Where an allocation number was obtained for the original invoice, ask the accountant how the correction is handled, because the rules for cleared invoices can differ from ordinary ones.
When a customer asks for a copy of an old invoice, send the archived original, marked as a copy, and never regenerate it from current data, which may have changed since the date of issue.
A good template is boring. It carries the registered legal name and address, the VAT file or company number, a numbered series, the date, a description specific enough that an auditor understands the supply, the VAT line, and payment details. It does not carry marketing text or changing layouts that make comparison between documents harder.
The description line deserves attention. "Services" tells the authority nothing, while "Monthly website maintenance for March, 10 hours" ties the amount to something real. The more precise the description, the fewer questions arise later from customers and inspectors.
Add the payment terms to the document and make them match the contract. If the contract says payment within 30 days of the invoice, state the due date on the invoice, so that a late payment is easy to prove.
Subscriptions and retainers generate the same invoice every month. Automating the schedule saves time, but each document must still be correct for the period: the right month in the description, the correct VAT rate and the right customer details, which change more often than people expect.
Prepayments need care. When a customer pays in advance, a document must reflect the payment, and the final invoice later offsets it. Ask your accountant how to record a prepayment so that VAT is reported in the correct period and the final invoice shows only the balance.
For long projects with milestones, issue invoices at the milestones named in the contract and keep the signed milestone confirmation with each one. It protects you if a customer later disputes whether the work was complete.
4invoices.net creates PDF invoices from your details and keeps an archive of what was issued. It does not file anything with the Israeli Tax Authority, does not request allocation numbers and does not apply Israeli VAT treatment on its own, so the dealer sets the rate and document type. Ask your accountant to approve the template before the first use.
Multi-currency invoices and FX differences are unclear in the books.
4invoices.net can issue PDF invoices; confirm exchange rates and the accounting treatment of FX differences with your accountant. 4b2b does not post exchange differences automatically.
Domestic invoices need the ITA allocation number; export invoices have different requirements.
Confirm with the ITA which invoices need clearance. 4b2b does not request allocation numbers and does not split domestic and export flows automatically.
Two colleagues issue invoices on the same day and the numbering clashes.
Define one numbered series and one person who may cancel documents. 4invoices.net archives the PDFs you issue; the numbering policy is yours.
A tax invoice (חשבונית מס) requests payment and shows VAT; a tax invoice-receipt (חשבונית מס קבלה) does both jobs at once when payment is received on the spot. Issue the combined document only when the money has actually arrived, and issue a separate receipt when payment follows an earlier invoice.
Yes, many Israeli businesses do. The invoice shows the foreign currency amount and your books record the shekel equivalent at the rate that applies to your situation, commonly the Bank of Israel representative rate. Fix the currency in the contract and ask the accountant how to record exchange differences. Put the rule in your contract.
No. A transaction invoice or proforma (חשבון עסקה) asks for payment but is not a tax document, so the customer cannot deduct VAT on it. Send a tax invoice or tax invoice-receipt when the supply or payment event takes place, and archive both documents under their own numbers. The distinction matters at audit.
Issue a credit invoice (חשבונית זיכוי) that refers to the original number, then a new correct invoice if needed. Do not delete or overwrite the original. Ask your accountant how to treat the correction when an allocation number was involved, and keep all documents in the archive. The chain must remain visible.
No. 4invoices.net generates PDF invoices from the details and rates you enter and archives them. It does not know which Israeli VAT treatment applies to a sale and does not file with the authority. Your accountant should confirm the rate and the document type before you start issuing invoices. Do not rely on defaults.
This page is informational. Confirm requirements with the competent authority; 4b2b tools cover general invoicing and records only.
