Israeli E-Invoice

Instructions

Step 1: Determine Invoice Type

Ask the user what type of document they need:

Code	Hebrew	English	When to Use
300	hashbonit mas	Tax Invoice	B2B sales, services over threshold
305	hashbonit mas / kabala	Tax Invoice / Receipt	B2C with immediate payment
310	hashbonit zikui	Credit Invoice	Refunds, corrections, returns
320	kabala	Receipt	Payment confirmation only
330	hashbonit proforma	Proforma Invoice	Quotes, pre-billing (no allocation needed)

Step 2: Collect Required Fields

For all invoice types, gather:

• Seller details: Business name, TIN (mispar osek), address, phone
• Buyer details: Business name (or individual), TIN (if B2B), address
• Transaction: Date, item descriptions, quantities, unit prices
• Payment: Method (cash, transfer, check, credit card), terms

Step 3: Calculate VAT

• Standard Israeli VAT rate: Always verify current rate with the Tax Authority (standard rate is 17% as of 2024-2026, but rates may change)
• VAT calculation: vat_amount = net_amount * vat_rate
• Total: gross_amount = net_amount + vat_amount
• For VAT-exempt transactions (osek patur), no VAT line -- use receipt (320) instead

Step 4: Check Allocation Number Requirement

Determine if an allocation number is needed:

• Required if: Invoice amount >= current threshold AND invoice type is 300, 305, or 310
• Current thresholds: Always verify current thresholds with the Tax Authority, as requirements change over time
• Not required for: Receipts (320), proforma (330), invoices below threshold

If allocation number IS required:

1. Inform user they must request from SHAAM before issuing
2. Provide the API call structure (see references/shaam-api-reference.md)
3. The allocation number must appear on the printed/sent invoice

Step 5: Generate Invoice Document

Create the invoice with all fields formatted per Israeli standards:

• Date in both Gregorian (DD/MM/YYYY) and Hebrew calendar
• Amounts in NIS (New Israeli Shekel)
• VAT breakdown as separate line
• Sequential invoice number from seller's series
• Allocation number (if applicable)

Step 6: Validate

Run validation checks:

1. All required fields present
2. TIN format valid (9 digits with check digit)
3. VAT calculation correct
4. Invoice number sequential
5. Date not in the future
6. Allocation number present if above threshold

If validation fails, report specific errors and how to fix them.

Examples

Example 1: Simple B2B Tax Invoice

User says: "Create a tax invoice for a web development project, 15,000 NIS to ABC Ltd" Actions:

1. Identify: Tax Invoice (type 300), above threshold -- allocation needed
2. Collect: Seller and buyer details
3. Calculate: Net 15,000 + VAT (at current rate) = Total amount
4. Guide: Request allocation number from SHAAM
5. Generate: Formatted invoice document Result: Complete tax invoice with all required fields and allocation number guidance

Example 2: Small B2C Receipt

User says: "I need a receipt for a 500 NIS cash payment" Actions:

1. Identify: Receipt (type 320), below threshold -- no allocation needed
2. Collect: Seller and buyer details
3. Generate: Receipt document Result: Simple receipt, no allocation number required

Example 3: Credit Invoice for Refund

User says: "I need to issue a credit note for invoice #1234, partial refund of 3,000 NIS" Actions:

1. Identify: Credit Invoice (type 310)
2. Reference: Original invoice #1234
3. Calculate: Credit amount with VAT reversal
4. Check: Allocation requirement based on amount Result: Credit invoice referencing original, with correct VAT reversal

Bundled Resources

Scripts

• scripts/validate_invoice.py — Validates Israeli e-invoice JSON against SHAAM requirements: checks required fields, TIN (mispar osek) format and check digit, invoice type codes, VAT calculation accuracy, and allocation number thresholds. Also referenced in Troubleshooting below. Run: python scripts/validate_invoice.py --help

References

• references/shaam-api-reference.md — SHAAM (Tax Authority) API endpoints for requesting allocation numbers, OAuth2 authentication setup, and request/response formats. Consult when integrating with the SHAAM e-invoice API. Also referenced in Step 4 above.
• references/invoice-types.md — Complete listing of Israeli invoice type codes (300, 305, 310, 320, 330, 400) with required fields per type, VAT applicability, and allocation number requirements. Consult when determining which invoice type to use.
• references/compliance-timeline.md — Progressive e-invoice mandate timeline per Amendment 157 to the VAT Law, showing threshold reductions from 25,000 NIS down to all invoices. Consult when checking current allocation number thresholds.

Gotchas

• Israeli e-invoices require a SHAAM allocation number (mispar hiktza'a) from the Tax Authority. Agents may generate invoices without this number, making them non-compliant.
• The e-invoice XML schema follows the Israeli Tax Authority specification, not the European Peppol or UBL standard. Agents may generate UBL-formatted XML that Israeli systems cannot process.
• Starting from 2024, Israeli businesses above the turnover threshold must issue e-invoices. Agents may not check whether the business meets this threshold before skipping e-invoice requirements.
• The SHAAM system validates the buyer's tax ID (mispar osek) in real-time. Agents may use placeholder or invalid tax IDs that will be rejected by the validation service.

Troubleshooting

Error: "Invalid TIN format"

Cause: Israeli TIN (mispar osek) must be exactly 9 digits with valid check digit Solution: Verify the number with the check digit algorithm. Run scripts/validate_invoice.py for validation.

Error: "Allocation number required"

Cause: Invoice amount exceeds current threshold for mandatory allocation Solution: Request allocation number from SHAAM API before issuing invoice. See Step 4.

Error: "VAT rate mismatch"

Cause: Using incorrect VAT rate (rate changes periodically) Solution: Always verify current rate with the Tax Authority. Check their website or contact them directly for the most up-to-date VAT rate.

Error: "Invoice type not suitable"

Cause: Wrong invoice type selected for the transaction Solution: Review the invoice type table in Step 1. Common mistake: using type 300 when 305 (with receipt) is needed for immediate payment.