Israel Self-Invoice

Self-invoice is an invoice that the company itself issues internally and is the one that reports the transaction to the tax authorities, both VAT on purchases and VAT on sales.

Creating a Self-Invoice

For a Self-Invoice, a specific customer and vendor need to be set up. In order to do this, you will need the company tax registration and Tax ID. To find the company tax registration and Tax ID, Go to Setup > Company > Subsidiaries and click View on the record of the selected subsidiary. The fields should be populated with a 9 digit number.

To set up customer for self-invoice:

  1. Go to Lists > Relationships > Customers > New.

  2. From the Custom Form, select IL Customer Form.

  3. Fill out the required fields, and then do the following:

    1. In the Tax Registration Number field, enter the tax registration number taken from your subsidiary details.

    2. On the Financial subtab, from the Terms list, select Immediate.

  4. Click Save.

To define default customer VAT code:

  1. Go to Lists > Relationships > Customers.

  2. Click the Edit link next to the applicable customer.

  3. To define the default VAT on sales self-invoice, do the following:

    1. Click the Financial subtab.

    2. From the Tax Item list, select ILM — מע"מ עסקאות חשבונית עצמית— Self Invoice Sales Tax.

  4. Click Save.

To set up vendor for self-invoice:

  1. Go to Lists > Relationships > Vendors > New.

  2. From the Custom Form list, select IL Vendor Form.

  3. In the Taxpayer ID field, enter the taxpayer id taken from the subsidiary details.

  4. On the Financial subtab, from the Terms list, select Immediate.

  5. Click Save.

To define default vendor VAT code:

  1. Go to Lists > Relationships > Vendors.

  2. Click the Edit link next to an Israeli vendor.

  3. Click the Subsidiaries subtab.

  4. To define the default VAT on Purchase self-invoice, from the Tax Code list, select ILC - מע"מ תשומות חשבונית עצמית Self Invoice Purchase Tax.

  5. Click Save.

To open a new offset account:

  1. Go to Lists > Accounting > Accounts > New.

  2. From the Type list, select Other Current Liability.

  3. From the Subsidiaries list, select the Israeli subsidiary and name it Self Invoice.

  4. Click Save.

To define item for self-invoice:

  1. Go to Lists > Accounting > Items> New.

  2. Create a new Item of the Non-inventory Item for Sale type.

  3. In the Item Name/Number field, enter Self Invoice.

  4. On the Accounting subtab, from the Income Account list, select the Self Invoice account created in the previous step.

  5. Click Save.

Vendor bills can be created using either an Item or an Expense. If you use an item, this must be created on the purchase side using the same expense accounts.

Resale items can be used on both Invoices and Vendor Bills.

Creating a Customer Self-Invoice

With the Israel Localization SuiteApp, you can create a customer self-invoice.

To create a customer self-invoice:

  1. Go to Transactions > Sales > Create Invoices.

  2. From the Custom Form list, select the IL Product Invoice form.

  3. From the Customer list, select the Self-Invoice Customer.

  4. Ensure that the customer invoice and vendor bill date, currency, VAT periods, amounts and invoice number are the same as on the Self Invoice Vendor Bill.

  5. Select the item defined for self-invoice and ensure that the VAT code is populated with ILM - מע"מ עסקאות חשבונית עצמית - Self Invoice Sales Tax.

  6. The invoice amount will include VAT.

To receive a payment for self-invoice:

  1. Go to Transactions > Sales > Create Invoices > List.

  2. Save the invoice, issue a payment acceptance (receipt) to the Self-Invoice Account.

  3. Click the View link next to the invoice created in the previous procedure.

  4. Click the Accept Payment button.

  5. From the Account list, select the self-invoice account.

  6. If the Tax Registration Number is the same as the company VAT number, the system automatically detects that it is a self-invoice and invoice title will change accordingly.

  7. Click Save.

To create a vendor self-invoice:

  1. Go to Transactions > Payables > Enter Bills.

  2. From the Vendor list, select the self-invoice vendor.

  3. Copy the invoice reference number from Creating a Customer Self-Invoice to the vendor bill Invoice Number.

  4. Click the Expense subtab, and on the first line do the following:

    1. Select the Self-invoice expense.

    2. From the Tax Code list, select ILC — מע"מ תשומות חשבונית עצמיתSelf Invoice Purchase Tax.

    3. Click Add.

  5. On the second line, do the following:

    1. From the Account list, select the Self invoice account.

    2. In the Amount field, enter the amount, which should be a negative number (-).

    3. From the Tax Code list, select מע"מ תשומות לא לדיווחVAT on Purchase not for Reporting.

    4. Click Add.

  6. Click Save.

To make a vendor bill payment for self-invoice:

  1. From the Vendor Bill, go to Make Payment.

  2. Select the correct bank and process the payment.

Reporting for Self-Invoice

The offset account total resets at the end of the process.

General Notices