Tax Authority Allocation Numbers in VAT Reports for Israel

VAT reports in Israel must include part of the allocation number issued by the tax authority, as a unique identifier for each invoice.

This feature conforms to the new legal requirement of the Israeli Tax authorities for the introduction of continuous transaction control, with support for the assignment of the allocation number to eligible transactions.

As part of their economic plan for 2023-2024, the Israeli government has decided to introduce a continuous transaction control model to prevent the issuance of falsified invoices and tax fraud. The mandate is applicable to Business-to-Business (B2B) invoices, with the initial limit for each transaction of over 25000 NIS. This limit will be lowered every year based on a given schedule. The request uses an API technology and the tax authority must provide this unique identifier prior to the issue of that invoice. This tax authority approval is a mandatory prerequisite for printing these transactions and claiming VAT.

A Global Descriptive Flexfield Attribute has been reserved to accommodate this unique identifier at the Receivables Invoice level. Using a specific API, the transactions exceeding a specific amount (the limit is defined by a lookup) are extracted and sent to the Tax Authorities for the assignment of an Allocation Number to each transaction. A different process updates the Global descriptive flexfield of the transactions in the system with the Allocation Numbers provided by the Tax Authorities.

You may need to work with a local Service Provider to interact with the Tax Authority portal. The tax authorities provide the allocation numbers that are uploaded to Oracle ERP Cloud to be registered against the corresponding transactions.