Retaining Fiscal Documents - How Long and How
Document retention is one of the less-discussed requirements, but it's checked in practice during every income tax or VAT audit.
How long you need to keep them
Fiscal documents (tax invoices, transaction invoices, receipts, and credit notes) must be kept for 7 years from the end of the tax year they relate to. This applies even if the business file was closed before that period ended: closing the business doesn't shorten the retention obligation.
Which day the clock starts on
The count starts at the end of the tax year, not on the document date. An invoice issued in February 2026 starts counting from 31 December 2026, so it has to be kept until the end of 2033. In practice that means a document from early in the year is kept for close to eight years.
This is a common miscalculation: counting seven years from the document date can lead to deleting documents almost a full year too early.
There is a second edge that is easy to miss. The rules set seven years from the end of the tax year or six years from the day the return for that year was filed, whichever falls later. Filing late therefore extends the retention period, so measure against both dates rather than only the first.
Why 7 years and not less
The Israel Tax Authority can request documents for an audit years after a transaction took place. A document deleted or lost before the 7 years are up can be treated as if it was never issued at all, which exposes the business to an assessed tax estimate instead of one based on what was actually reported.
The gap between those two is wide. Actual reporting rests on what happened; an assessment rests on the assessor's estimate, and its default tends to run against the business when there's no documentation to counter it.
What the retention duty covers, not just the invoice itself
- The digitally signed document file itself, including a full snapshot of its state at the time.
- The record of sequential numbering, so you can prove there were no gaps in the sequence.
- Credit notes tied to those documents.
- Open Format export files, if and when they were submitted.
- Expense documentation and supplier receipts the reporting rests on.
The second item is the one most often forgotten. Keeping the PDFs alone isn't enough if you can't show the numbering is unbroken, because the sequence is what proves no invoice was quietly removed from the middle.
What isn't covered by the same duty
Non-fiscal information (like a customer record with no active documents) isn't subject to the same retention requirement, and can be deleted at the customer's request, subject to privacy law. Fiscal documents, by contrast, can't be deleted even at the customer's request: the statutory retention duty outranks a deletion request.
This is worth knowing in advance, because it comes up in practice the moment a customer asks to be "removed from your system".
Where to keep them
The law doesn't mandate a particular medium, but it does require that documents stay available, readable, and producible on demand. A single backup on an external drive in a desk drawer barely meets that: a drive that burns out or gets encrypted by ransomware leaves the business with nothing.
Three questions to test where you stand
- If today's computer disappeared right now, how many of your 2021 documents still exist?
- Who besides you could produce the file if you were abroad during an audit?
- Has the backup ever actually been tested, or was it just configured once?
What happens if you switch bookkeeping systems partway through
Moving between systems doesn't exempt you from keeping documents issued in the previous system. Make sure to fully export the old documents, including historical Open Format files, before abandoning the previous system, rather than relying on being able to access the old account later.
The risk here is real: an unpaid account can be closed, a vendor can shut down, and terms of service rarely promise permanent access to someone who is no longer a paying customer. The export has to happen before you disconnect, not after.
The full order of operations for a move, including what to check after importing and why the import has to precede the first document issued in the new system, is in the switching invoicing software guide.
What happens when you close the business file
Closing a file with the Tax Authority ends the ongoing reporting duty, but not the retention duty. Documents from the active years remain subject to retention until their own seven years are up, even if the business no longer exists. Closing a business and deleting everything the same week creates an exposure that only surfaces if an audit arrives.
What is actually kept, in three layers
The first layer is the documents themselves: the signed files, exactly as they were sent to the customer. The second is the data behind them, meaning the ability to produce a Open Format file for any year. The third is the incoming side: supplier receipts, purchase invoices and payment confirmations that the expense deduction and input VAT rest on.
Businesses remember the first layer and forget the third. In an audit, an expense with no supporting document simply is not recognized, and the difference lands on taxable income.
What to do when a document really is lost
It happens. A supplier that shut down, a deleted email, a drive that died. The right move is to ask the other side for a true copy and to document the request, rather than reconstructing the document yourself. Recreating a supplier invoice on your own is exactly what looks wrong in an audit.
Where the document is one you issued, the question is different: if the system still holds the record, it can be produced again from the stored copy. A document lost entirely, with no record and no backup, is a hole in the numbering that has to be explained.
How Slate keeps documents for 7 years
Once a document is issued on Slate and gets the "issued" status, it can never be deleted or edited, not by the user and not through support. That's how the 7-year retention duty is preserved structurally, not just as a policy. Historical documents imported from a previous system (including Open Format files) are kept separately from Slate's live numbering, so the historical record never gets mixed up with new documents.
This is general information, not tax advice. For a specific situation, talk to an accountant or tax adviser.
Common questions
How many years do invoices have to be kept in Israel?
Seven years from the end of the tax year the document belongs to. An invoice from February 2026 counts from 31 December 2026 and is kept until the end of 2033, which is nearly eight years in practice.
Can records be kept digitally, or is paper required?
The law does not mandate a medium, but it does require documents to be available, legible and producible on demand. Digital storage meets that when there is a backup that has actually been tested, not one drive in a drawer.
Does the duty continue after the business file is closed?
Yes. Closing the file ends ongoing reporting but not retention. Documents from the trading years are kept until their own seven years are up.
A customer asked me to delete their details. Can I?
Non-fiscal information can be deleted, a fiscal document cannot. The statutory retention duty overrides a deletion request, and an issued invoice stays even if the customer asked otherwise.
What happens to documents when moving to another system?
The responsibility stays with you. Export everything before disconnecting from the old system, including Open Format files, rather than relying on future access to an account you no longer pay for.
What counts as a missing document in an audit?
Not only a lost invoice. Being unable to show the numbering is unbroken, or being unable to produce a file, are both defects in the books and can lead to a best-judgment assessment.