On January 1, 2025 the Israel Tax Authority began refusing requests for allocation numbers. A week later, on January 7, senior Authority officials sat in front of accountants at an Institute of CPAs seminar and went through what happens after a refusal. Most of the answers they gave there have not been written down anywhere since.
What the Authority refuses over
Yoel Halimi of the Tax Authority said a number is withheld only on suspicion of illegitimate activity, meaning a fictitious invoice. He addressed a worry that keeps coming up in accountants' groups, that a dealer with a VAT debt will not get a number: "Absolutely not. That is what enforcement and debt collection are for."
He also confirmed a full separation between the system that decides on refusals and the VAT offices. An office manager or audit supervisor cannot block a dealer's number over an assessment dispute, an appeal or late returns. The only thing that blocks a number automatically is closing the dealer's file, after a hearing.
Four options after a refusal
At a session for large companies in February 2024 the Authority laid out the options. You can cancel the request and drop the deal. You can go ahead without a number, and then the customer does not deduct the VAT. You can go ahead with a reverse charge. Or you can ask for a review. By law the hearing is held within two business days, and a dealer who wants more time to prepare can pick a later date. If the request is still refused, an objection can be filed, and after that the district court.
Adv. Yael Naveh, then deputy senior legal adviser to the Authority, addressed whether choosing one of the options marks a dealer as suspect. In her words, cancelling or withdrawing a request is not enough to create a problem for them, and any step against them requires a preliminary review. "Law-abiding parties need not fear choosing any of the options," she said.
Reverse charge is not open to everyone
At the same seminar the accountant Avner asked whether a reverse charge can be chosen without involving the Authority. The answer was no. A reverse charge is possible only after the Authority has announced the deal is suspect. In February 2026 Jack Belanga of the Institute of CPAs repeated this, saying that is the position the Authority gave him even where the software technically allows otherwise.
In a reverse charge the supplier produces a zero-rate invoice, with a special allocation number and instructions printed on it. The customer records it on both the sales side and the input side. According to the Authority, since there is no VAT on it to offset, it also offers no incentive to people who sell fake invoices.
The hearing went through, now what
If the hearing shows the invoice is sound, the Authority does not send the number itself. "We have no such thing as pushing allocation numbers," it was said there. The supplier's invoicing software sends a repeat request with the same invoice ID, and the number comes back within 0.2 seconds. The document is not produced again. The number is printed on the copy of the invoice, and the customer sees it in their personal area.
Belanga criticized this at the seminar. In his view, when the mistake is the Authority's, there is no reason the dealer should have to do anything. The Authority said it would consider a different mechanism. Meanwhile, a business whose request was refused should make sure its software can send a repeat request for the same invoice.
In January 2025 they said a number could be requested retroactively up to a year back. The law has changed since. According to Belanga, the amendment in force from January 2026 allows requesting a number after the invoice is produced with no time limit, even in the middle of an audit. The allocation number guide explains what the request itself looks like.