The detailed VAT report - PCN874, who files it and what goes in
The detailed VAT report is a file that accompanies the periodic report and itemizes every invoice separately, instead of the totals alone. Its formal name is PCN874, after the file structure the Tax Authority defines.
Who has to file
The obligation applies to a dealer whose annual turnover exceeds NIS 500,000, and to anyone required to keep books under the double-entry method regardless of turnover. Companies and partnerships with a corporate partner came in with the September 2025 reporting period, and sole dealers from January 2026. Both stages are now in force.
Before the expansion the threshold stood at NIS 2.5 million for a sole dealer and NIS 1.5 million for a company. Dropping it to NIS 500,000 brought in small businesses this filing had never touched.
An exempt dealer charges no VAT, files no periodic VAT report and owes no detailed report. A non-profit comes in above NIS 20 million of turnover, a financial institution above NIS 4 million.
There is also a side door: anyone filing for a VAT refund above the amount set in the regulations has to attach a detailed report even where turnover sits below the threshold.
What it actually changes
A business that has been filing bimonthly and becomes subject to detailed reporting moves to monthly reporting and monthly payment. Six filings a year become twelve, and each one needs the books closed by the 23rd of the following month.
VAT leaves the account at twice the rate. That cash flow effect appears nowhere in the text about the turnover threshold.
What the file holds
The periodic report asks for six or seven totals. The detailed file asks for the invoices behind them, one line each, on two sides.
The sales side carries every tax invoice issued during the period: the invoice number, the date, the customer's dealer number, the amount before VAT and the VAT. The inputs side carries every tax invoice received, with the same fields and the supplier's dealer number.
The file opens with a header record holding the dealer's details and the period, and closes with a summary record counting the lines and the amounts. Those summary amounts are what has to match the periodic report for the same period.
Identified transactions and the NIS 5,000 threshold
An invoice above NIS 5,000 before VAT must carry the customer's dealer number, ID number or passport number. Such a transaction is called an identified transaction in the file, and without the number it is not accepted.
Below NIS 5,000 the dealer number is not required and the transaction is reported as unidentified. The inputs side is stricter: the supplier's dealer number and the invoice number are needed at any amount, because without them there is nothing to match against the supplier's own filing.
This threshold connects directly to the allocation number required on large invoices. In both, the Tax Authority is looking for the two sides of an invoice to meet.
What can be grouped
Not every line in the file is a single invoice. A cash register total is reported as one unidentified transaction, with the number of underlying sales in the quantity field. Small invoices paid out of petty cash can be summed into one record even when they come from different suppliers, again with the invoice count in the quantity field.
Alongside these there are separate classifications for import declarations, for self-invoices under regulations 6a and 6b, and for transactions with the Palestinian Authority. Each enters the file differently, and a wrong classification is a common source of a gap between the file and the report.
The deadline
The detailed report is filed by the 23rd of the month following the reporting period, rather than the 15th that applies to a plain periodic report. The extra eight days apply automatically to everyone subject to detailed reporting, with nothing to request.
The periodic report and the detailed file cover the same period. Failing to file the file counts as failing to file the report, carries a penalty plus interest and linkage, and in practice holds up VAT refunds until the file is accepted.
Producing and filing it
The file comes out of the software the invoices were recorded in. Any bookkeeping or invoicing system that meets the uniform file structure can export it.
Filing happens in the personal area on the Tax Authority site: you upload the file, the system validates it and returns a list of errors if there are any, and only then do you transmit the periodic report with matching totals. Anyone represented by an accountant or a tax adviser uploads through them.
That error list is worth reading slowly. It catches an invoice missing a dealer number on upload day, instead of leaving it for a Tax Authority cross-check six months later.
The errors that keep coming back
A gap between the file and the periodic report is the first. They can be built from two different sources, and one invoice recorded in one period and reported in another is enough to split the totals.
After that come line-level errors: a missing dealer number on an invoice above NIS 5,000, a wrong check digit in a hand-typed dealer number, an invoice number containing letters in a field that takes digits only, and the same invoice number appearing twice.
The root cause is nearly always the same one. The customer's dealer number was captured after the invoice went out, or never captured at all. A system that asks for it at the moment of issue, while the customer is still in front of you, saves every one of these corrections. Background on what such a system has to retain is in the bookkeeping guide for the self-employed.
Who can defer to 2027
A sole dealer whose input invoices are mostly small can apply to defer the obligation to 2027. The test is that at least 90 percent of the total value of input invoices, or 90 percent of their number, are for NIS 5,000 or less before VAT.
A business whose expenses are all small yields little from invoice-level matching, so it goes to the back of the queue. The application goes to the Tax Authority, and it is worth checking with your accountant before relying on it.
Common questions
Who has to file a detailed VAT report?
Any dealer whose annual turnover exceeds NIS 500,000, and anyone required to keep double-entry books regardless of turnover. Companies and partnerships came in with the September 2025 reporting period, sole dealers from January 2026. An exempt dealer is not required to file.
What is the PCN874 file?
It is the name of the file structure that carries the detailed report. Your bookkeeping or invoicing software produces it, and it lists every tax invoice issued and every tax invoice received during the period, with the invoice number, the date, the other party's dealer number, the amount and the VAT.
Does the detailed report replace the periodic report?
No, it sits on top of it. The periodic report stays the same set of totals, and the detailed file is the itemization behind them. Both cover the same period, and the amounts in both have to match.
When is the detailed report due?
By the 23rd of the month following the reporting period, rather than the 15th that applies to a plain periodic report. The extra eight days apply automatically, with nothing to request.
When must I record the customer's dealer number?
When the invoice exceeds NIS 5,000 before VAT. A transaction carrying a dealer number is called an identified transaction, and without it the file will not be accepted. Below NIS 5,000 there is no such requirement and the transaction is reported as unidentified.
What happens to a bimonthly filer who becomes subject to detailed reporting?
They move to monthly reporting and monthly payment. Six filings a year become twelve, and VAT leaves the account at twice the rate.