Invoicing in English and foreign currency
An Israeli freelancer working with an overseas client runs into three questions in a row: may the invoice be in English, is VAT charged, and how do you report an amount denominated in dollars. All three answers are simple, and all three need precision.
- Document languageEnglish is allowed, as long as every required detail appears
- VAT rateZero on an export transaction that meets the conditions, 18% otherwise
- Reporting currencyBooks and reports in shekels, at the rate on the liability date
Is an English-language invoice allowed
Yes. The law does not require Hebrew, it requires content. A document that carries every required detail, is sequentially numbered and digitally signed, is valid in English.
What has to appear: the business name and business number, the customer's details, the date, a serial number, an itemized list of goods or services, and the amount. For a licensed dealer, VAT separately as well, including when it is zero.
In practice many businesses issue a bilingual document, with English headings and the business details also in Hebrew. That suits both sides: the client understands the document, and the accountant in Israel recognizes it immediately.
Zero-rated VAT, and when it does not apply
This is where the real money sits. Section 30(a)(5) of the VAT Law sets a zero rate on providing a service to a foreign resident. Exporting goods is handled by section 30(a)(1), and it requires an export entry as documentation.
A zero rate is not an exemption. The transaction is taxable, at a rate of zero, so it remains a taxable transaction in every respect: it enters the VAT report on its own line, and it does not impair the right to deduct input VAT on the expenses that produced it. That is the substantive difference between zero-rated and exempt, and it is where the whole advantage lies.
The law excludes situations where the service is in practice also provided to an Israeli resident in Israel, even where the contract is with a foreign company. That is the exception people fall into: an American company ordering a service whose beneficiary sits in Tel Aviv does not necessarily create an export transaction. In borderline cases, clarify in advance rather than in an audit.
Documentation is part of the condition. A contract, correspondence, payment evidence from abroad, and anything showing who the client is and where they are based.
Translating foreign currency into shekels
Books in Israel are kept in shekels, even when the invoice is denominated in dollars or euros. The amount is translated at the rate on the date the tax liability arises, and the shekel amount is what enters the report.
The document itself can present both: the foreign currency amount, which is what the client pays, and the shekel equivalent with the rate used for translation. That presentation prevents arguments in both directions.
Exchange rate differences. When payment arrives at a different rate from the one on the liability date, a difference arises. That difference does not change the invoice that was issued. It is recorded separately as exchange rate income or expense and handled in the bookkeeping. There is no need to issue a credit note because a rate moved.
Allocation numbers on export transactions
In a zero-rated transaction there is no output VAT, so the client has nothing to deduct. The allocation number requirement was built around input VAT deduction, so it does not arise here.
In a foreign-currency transaction that does carry full VAT, for example a service actually provided in Israel, the threshold is measured in shekels on the translated amount before VAT. The rest of the detail is in the allocation number guide, and the conditions for the zero rate are in the zero-rated VAT guide.
An osek patur issues English documents too
An osek patur working with an overseas client issues the same documents they issue domestically, a receipt and a transaction invoice, only in English.
For them there is no VAT question at all, since they charge no customer VAT. What does apply is that overseas income counts in full towards the turnover ceiling, and a business growing through foreign clients can cross it without noticing.
Bilingual glossary
This is the part overseas clients and Israeli accountants argue about most, because literal translation is not always accurate.
| Hebrew | English | Note |
|---|---|---|
| חשבונית מס | Tax invoice | The document that supports an input VAT deduction |
| חשבונית עסקה | Transaction invoice / Proforma invoice | A payment request, no deduction |
| חשבונית מס קבלה | Tax invoice receipt | Combined document, transaction and payment together |
| קבלה | Receipt | Records a payment received |
| חשבונית מס זיכוי | Credit note | Cancels an invoice already issued |
| הצעת מחיר | Quote / Price offer | Pre-transaction document |
| תעודת משלוח | Delivery note | Records delivery, not a charge |
| עוסק מורשה | Licensed dealer / VAT-registered business | |
| עוסק פטור | Exempt dealer / VAT-exempt business | |
| מספר עוסק | Business ID / VAT number | |
| מע״מ | VAT | |
| מס תשומות | Input VAT | |
| מע״מ בשיעור אפס | Zero-rated VAT | Not "exempt", the difference is substantive |
| מספר הקצאה | Allocation number |
The common mistake in this table is translating zero-rated VAT as "VAT exempt". A foreign client will not notice, an accountant will, and the two phrases describe two different situations.
What else belongs on a document going abroad
International payment details. IBAN, SWIFT and the bank name. An invoice without them comes back as a question and loses a week.
Explicit payment terms. Net 30 or Due on receipt, alongside the actual due date. Timelines are read differently in different markets.
An unambiguous date format. 03/09/2026 reads differently in the United States and in Europe. Writing 3 September 2026 removes the problem.
The currency beside every amount. Not just a symbol but a code: USD, EUR, ILS.
What goes wrong on export transactions
The first is issuing a zero-rated invoice without confirming the transaction meets the conditions. If it does not, the VAT is demanded retroactively, from the business rather than the client.
The second is booking the dollar amount. Reporting is in shekels, always.
The third is treating exchange rate differences as an invoicing error. They are a separate entry, not a correction.
The fourth is producing the English document outside the system, in a hand-built file. A fiscal document needs a digital signature and sequential numbering, in English and for an overseas client just the same.
How Slate issues in English and foreign currency
Slate issues any document type in English, on the same numbering sequence and with the same digital signature as the Hebrew ones. A foreign-currency document shows the amount in the transaction currency alongside the shekel equivalent at the rate used, so the report gets the right number with no manual conversion. Headings and fields use the accepted terms, so an overseas client receives a document they recognize.
This is general information, not tax advice. On export transactions, confirm the conditions with an accountant before issuing.
Common questions
Is issuing an invoice in English allowed?
Yes. A document can be issued in English and in foreign currency, provided every required detail appears and the reporting to the Tax Authority is in shekels at the determining rate.
How is foreign currency translated to shekels?
At the determining rate on the chargeable date. The shekel amount is what enters the periodic report and the books, even where the invoice itself is in dollars or euros.
Is every client abroad exempt from VAT?
No. The zero rate is conditional, and it falls away where the service is in fact also supplied to an Israeli resident or relates to property in Israel. The detail is in the zero-rated VAT guide.
Does an export invoice need an allocation number?
The requirement was built around an invoice that enables an Israeli input-VAT deduction. In a zero-rated sale to a foreign resident there is no Israeli party deducting, so the question does not arise in the same way.
Can an osek patur issue documents in English?
Yes. They issue a transaction invoice and a receipt, and both can be in English. Their VAT exemption is unrelated to zero rating and does not make them an exporter.
What else belongs on a document going abroad?
International payment details including IBAN and SWIFT, the currency stated explicitly, the payment terms, and a service description a non-Hebrew speaker can understand.