A fake invoice carrying 17,000 shekels of VAT sells for 7,000 shekels in cash. Tal Shapira, CEO of Rivhit, cited that price at an Institute of CPAs workshop in April 2024. He said he had heard about such WhatsApp and Telegram groups from various investigations. Whoever buys such an invoice offsets VAT nobody paid. Whoever receives one from a supplier, unknowingly, may lose the VAT they offset.
Allocation numbers give the customer a way to check. At an Israel Tax Authority session for large companies, in February 2024, an Authority representative explained how to use it.
What you see in the personal area
As soon as a supplier gets an allocation number, the invoice also appears for the customer, in their personal area at the Tax Authority, in the list of invoices received. There you see the allocation numbers your suppliers requested for your business.
The first check is the VAT amount. If the VAT shown on screen is lower than what is written on the invoice, the Authority asks you to look into the gap before paying. The second check is the supplier's name. If the invoice shows one name and the system shows another, "there may be fraud here," the representative said.
He made clear there is no need to check every invoice. A regular supplier, whose service is good and whose timing fits, does not call for such a check. It is meant for a new supplier, or for any case where you have even a small doubt.
Asking for a number before the work starts
At the CPAs workshop the accountant Avner recommended an earlier step. When you start working with someone for the first time and are not sure a proper invoice will arrive at the end of the job, ask them at the start to request an allocation for the transaction account. Whoever gets one, he said, knows they are dealing with a real business. Tal Shapira added that chains already require this: Shufersal sent all its suppliers an instruction to request an allocation number on the transaction account, before invoices are even discussed.
When you pay against a transaction account in instalments, the personal area shows the VAT left to use next to the approval. According to the Authority, a payment above that amount may not get an allocation number.
The supplier's invoice carries only the nine rightmost digits of the approval number. According to the Authority, in rare cases the same nine digits can appear on two different invoices. That is not a sign of forgery, because the combination of supplier, customer, date and amount is unique.