As Israel shifts towards a digital-first approach in combating tax evasion and improving financial transparency, the upcoming e-invoicing regulations are undoubtedly at the forefront of the changes. Businesses operating in Israel need to prepare for these changes, as they promise to redefine B2B transactions. Our team at Comweg specializes in SAP Document and Reporting Compliance (DRC), making us uniquely equipped to guide you through this transition.
Overview: Israel’s E-invoicing Landscape
Starting in January 2024, Israel will mandate e-invoicing for all B2B transactions exceeding 25.000 NIS (~6.500 EUR). This is part of a broader effort to modernize tax reporting and collection processes, making them more efficient, transparent, and cost-effective.
Phased Rollout for Compliance
The Israeli Tax Authority has proposed a staggered approach to ease into the new system:
- January 2024: E-invoicing for transactions over 25.000 NIS (~6.500 EUR)
- January 2025: E-invoicing for transactions over 20.000 NIS (~5.000 EUR)
- January 2026: E-invoicing for transactions over 15.000 NIS (~4.000 EUR)
- January 2027: E-invoicing for transactions over 10.000 NIS (~2.500 EUR)
- January 2028: E-invoicing for transactions over 5.000 NIS (~1.500 EUR)
Who Needs to Comply?
The new regulations apply to:
- VAT-registered businesses
- B2B transactions
- Taxable invoices
It’s worth noting that B2G (Business-to-Government) and B2C (Business-to-Consumer) transactions, including cross-border invoices, will not be affected by this regulation.
SAP DRC: Your Key to Compliance
With the SAP Document and Reporting Compliance (DRC) solution, your business can effortlessly adapt to these new requirements. DRC streamlines the e-invoicing process, ensuring that your company meets Israel’s real-time reporting and Continuous Transaction Control (CTC) needs.
Allocation Numbers and Digital Signatures
With SAP DRC, managing allocation numbers (מספר הקצאה) becomes seamless. These numbers must be obtained via API or government tax platforms and must be incorporated into each invoice before sending. Additionally, our SAP DRC services ensure that every e-invoice has the required digital signature for validation, fulfilling the compliance criteria.
Archiving
The new regulations demand that all e-invoices be securely archived for at least seven years.
Centralized Clearance and Real-Time Validation
The new CTC model replaces the inefficient post-audit approach. Using SAP DRC, companies can effortlessly comply with the Israeli Tax Authority’s real-time validation requirement.
Advantages of E-invoicing Through SAP DRC
- Cost Efficiency: Eliminate costs related to paper, printing, and postage.
- Speed and Reliability: Enable faster processing and payment cycles.
- Enhanced Data Integrity: Reduce the risk of errors and fraud through automated validation.
FAQs
When Does the Regulation Take Effect?
Mandatory e-invoicing begins in January 2024, initially targeting B2B transactions over 25.000 NIS.
What Security Measures Are in Place?
E-invoices require both an allocation number and a digital signature to guarantee compliance. Both can be managed efficiently through SAP DRC.
Why Comweg?:
At Comweg, we are experts in SAP Document and Reporting Compliance, and we have a deep technical understanding of the einvoicing and statutory reporting around the world. Our team of experienced consultants will work with you to ensure that you are fully compliant with the legal regulations. We will work with you to implement SAP DRC in your company, and we will provide ongoing support and maintenance to ensure that the system runs smoothly.
Project
Setting up a project for SAP Document and Reporting Compliance requires expert knowledge and experience. Consultants with specialized skills can help enterprises navigate the process, ensuring a successful and efficient implementation of SAP Document and Reporting Compliance in their systems.
Typical project lead time per country:
3-4 Months
Implementation
Successful implementation of SAP Document and Reporting Compliance requires effective collaboration between internal and external consultants. A dedicated team with specialized skills and knowledge can ensure a smooth and efficient implementation, delivering the benefits of SAP Document and Reporting Compliance to the enterprise.
Maintenance
To ensure long-term success of SAP Document and Reporting Compliance, proper maintenance and support is crucial. Externalizing this process to a partner can provide access to specialized skills and resources, helping to ensure a smooth and efficient maintenance and support experience. With a partner's expertise and dedicated support, enterprises can be confident in the continued success of their SAP Document and Reporting Compliance implementation.
Conclusion
While regulatory changes can be daunting, they also offer an opportunity for businesses to optimize their operations. With SAP DRC, you’re not just complying with Israeli regulations; you’re also positioning your business for greater financial transparency and operational efficiency.
For more information on how our SAP DRC services can help your business adapt to Israel’s upcoming e-invoicing regulations, feel free to contact us.
How can we help you?
Let's have a talk and explain your case to us.
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