What is an allocation number, and when is it required
An allocation number (mispar hakza’ah) is an approval the Israel Tax Authority attaches to a specific tax invoice before it counts as valid for the customer’s input-VAT deduction. The requirement applies to tax invoices whose pre-VAT amount crosses an annual threshold set by law, updated every year.
How it works in practice
The moment a tax invoice meets the conditions, the request for an allocation number is sent to the Tax Authority automatically right after issuing, no extra form or manual step needed. The process runs in the background and doesn’t hold up issuing the invoice itself.
What happens if the request fails
If the request isn’t approved for whatever reason, the invoice stays valid and issued as-is - the customer just won’t be able to deduct input VAT from it until a number comes through. You can request again, or acknowledge issuing without an allocation number if the customer doesn’t need the deduction.
Connecting your Tax Authority account
For requests to go out automatically, you need to connect your business to your Tax Authority account once, through Settings. From that point on, every qualifying tax invoice is handled with no further action on your part.