Paid, but no tax invoice in advance?Not a mistake · it is the law · and here is why

NETO is a dealer that reports Israeli VAT on a cash basis. By law, in such a business the invoice (a tax invoice-receipt) is issued only upon receipt of payment · before that, a pro-forma invoice is sent. Moreover: the law forbids the client to demand a tax invoice before paying. Here are the explanation, the wording of the law and the official confirmations.

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PaidThe invoice is issued

Section 47(a1)The client is protected by law

AI check · unofficial translationThis page is an unofficial English translation of the Hebrew original. The binding text of the Israeli VAT Law is the official Hebrew version published in Reshumot; the quoted sections were cross-checked against the official Nevo text, and NETO's mechanism is backed by an auditing CPA confirmation and Tax Authority certificates.

99%match to source Official text · Nevo (Hebrew) Hebrew original of this page CPA confirmation (Hebrew PDF)

AI summary · cash-basis businessClick to read the page summary

NETO is a dealer that reports Israeli VAT on a cash basis. In such a business the tax point arises upon receipt of the consideration, so a tax invoice-receipt is issued only after payment. Before payment a pro-forma invoice or payment demand is sent · a document that is not an accounting record and does not entitle you to deduct input VAT. Moreover, section 47(a1) of the VAT Law forbids the buyer to demand a tax invoice before payment in a transaction whose tax point arises upon receipt of the consideration. The client is protected twice: demanding an invoice in advance is forbidden, and from the moment you pay · NETO is required by law to issue the invoice within 14 days (in practice · immediately). Want the invoice that very moment? Pay by credit card.

VAT Law · Nevo (Hebrew) CPA confirmation · the tax point (Hebrew PDF) Hebrew original of this page

Cash basis · the tax liability arises when the payment is received, and only then is the invoice issued.
Before payment · pro-forma invoice / payment demand · not an accounting document.
Section 47(a1) · the client may not demand an invoice before paying.
Section 46 · after payment · an invoice within 14 days (in practice immediately).
Credit card · pay by card · the invoice is issued immediately.
This information is for guidance only · the binding wording is the Hebrew text published in Reshumot.

Quick navigation

In short
How it works · before and after payment
The wording of the law · the tax point
Client protection · section 47(a1)
Israel Invoices and the allocation number
Need an invoice right away?
The confirmations · backed by law and the Tax Authority
The full legal detail
Frequently asked questions
Summary

In short

You received a payment demand or a pro-forma invoice from NETO, you paid · and only then did the invoice arrive. That is exactly what the law requires of a business that reports VAT on a cash basis: the tax point arises when the money is received, so a tax invoice-receipt is issued upon payment and not before. And not only is this permitted · the client is forbidden to demand a tax invoice before paying.

Before payment · a pro-forma invoice or payment demand (not an accounting document, no input-VAT deduction).
Upon payment · a tax invoice-receipt with an allocation number · the binding document.
Client protection · section 47(a1) forbids demanding an invoice before payment.
Fast · pay by credit card · invoice immediately. Otherwise · within 14 days by law.

The core

This is how it works · before and after payment

In a business reporting on a cash basis, the VAT clock starts ticking only when the money arrives. Until then there is no taxable transaction yet · and therefore no tax invoice. Here are the two stages.

Stage 1 · before payment

Pro-forma invoice / payment demand

A document that details how much to pay. Useful and clear · but not an accounting document.

Not a tax invoice · does not entitle you to deduct input VAT.
No allocation number (Israel Invoices).
Enough to know exactly how much and when to pay.

Stage 2 · upon receipt of payment

Tax invoice-receipt

The moment the money is received · the tax point arises and the binding document is issued.

A tax invoice and a receipt in a single document.
With an allocation number · entitles you to deduct input VAT lawfully.
Issued immediately · and at the latest within 14 days (section 46).

The client is protected · section 47(a1) forbids demanding an invoice before payment

The document flow · from a pro-forma invoice, through payment, to a tax invoice-receipt with an allocation number · an order fixed by law that protects both sides

The wording of the law

When does the tax point arise · as the law states

The rule for services in the Israeli VAT Law is a cash basis: liability arises upon receipt of the consideration. At NETO, the tax point is anchored in section 29(1a) · and the service is provided to the client upon receipt of payment. Below are the sections · each in the Hebrew original with an unofficial translation, plus a plain-language explanation.

Section 24 · the tax point for services

Hebrew original · binding text

״בשירות חל החיוב במס עם קבלת התמורה ועל הסכום שהתקבל.״

Unofficial translation

“In a service, the tax liability arises upon receipt of the consideration and on the amount received.”

In plain languageThe default rule in the law for services is a cash basis · VAT is “born” the moment the money is received, and only on the amount actually received. No payment · no tax liability yet, and therefore no tax invoice.

Section 29(1a) · the tax point at NETO

Hebrew original · binding text

״בשירות שניתן על ידי עוסק שמחזור העסקאות שלו עולה על 15 מיליון שקלים חדשים בשנה וחלה עליו החובה לנהל פנקסי חשבונות לפי תוספת י״א להוראות מס הכנסה ("ניהול פנקסי חשבונות"), התשל״ג–1973 · יחול החיוב במס עם נתינת השירות...״

Unofficial translation

“In a service provided by a dealer whose transaction turnover exceeds 15 million new shekels per year and who is required to keep account books under Addendum 11 to the Income Tax Instructions (Bookkeeping), 5733-1973 · the tax liability shall arise upon the provision of the service...”

In plain languageAt NETO the tax liability arises upon the provision of the service. And as the company's auditing CPA has confirmed · the service is provided to the client upon receipt of the consideration and not before: as long as no payment has been made, no service has been provided and no transaction exists. That is why the invoice is issued upon payment.

Section wording · NevoThe Hebrew section above was cross-checked against the official text on Nevo. The binding text is the one published in Reshumot; the translation is unofficial.

Section 46 · when the invoice must be issued

Hebrew original · binding text

״חשבונית תוצא תוך ארבעה עשר יום ממועד החיוב במס.״

Unofficial translation

“An invoice shall be issued within fourteen days of the tax point.”

In plain languageFrom the moment the tax liability arises (that is · from the moment of payment) · the dealer has a legal duty to issue an invoice within 14 days. Meaning: the moment you pay, the invoice is guaranteed to you by law. In practice NETO issues it right after the payment.

Your protection

Not only permitted · the law forbids demanding an invoice before payment

The amendment to the law was not meant to burden the client · quite the opposite. It was designed to protect small and medium businesses from powerful clients who conditioned payment on receiving an invoice in advance. This is the right that protects both you and us.

Section 47(a1) · the buyer shall not demand an invoice before payment

Hebrew original · binding text

״הקונה לא ידרוש חשבונית מס ... לפני תשלום התמורה או חלקה · אם מועד החיוב במס בשל העסקה הוא עם קבלת התמורה ועל הסכום שהתקבל.״

Unofficial translation

“The buyer shall not demand a tax invoice ... before payment of the consideration or part of it · where the tax point for the transaction arises upon receipt of the consideration and on the amount received.”

In plain languageWhen dealing with a dealer reporting on a cash basis · the client is forbidden to demand a tax invoice before paying. The demand itself is contrary to the law. Hence the logic: payment cannot be conditioned on receiving an invoice in advance · because the invoice, by law, is born only after payment. For the binding text · see Nevo.

Two protections · not one

Before you pay · the client may not demand a tax invoice (section 47(a1)). No one may require you to “issue an invoice first”.

After you pay · the dealer is required by law to issue the tax invoice-receipt within 14 days (section 46), in practice immediately. Paying does not turn you into an invoice-chaser · the invoice is guaranteed.

So the order the law sets · first payment, then invoice · protects both sides with full clarity.

The real concern

Israel Invoices and the allocation number · what actually happens

We understand the concern. Since the “Israel Invoices” model began, an invoice above a certain amount requires an allocation number from the Tax Authority so that input VAT can be deducted. That is why clients want to be sure they will receive the allocation number. Here is how it is resolved · in full honesty.

When the allocation number is issued

The allocation number is part of the tax invoice, and at a cash-basis dealer the tax invoice is born upon payment. So the moment you pay · a tax invoice-receipt is issued with a valid allocation number, entitling you to deduct lawfully.

Why not an “advance allocation”

A dealer cannot scatter invoices (and allocation numbers) with no payment behind them · and then chase each one. That is exactly why the law fixes the order: first the payment · which crystallises the liability, and only then the invoice and the allocation.

What you receive and when

Immediately after payment · a tax invoice-receipt with an allocation number, a single document serving both as the deduction voucher and as the receipt. No need to chase · the document arrives and is available.

The “Israel Invoices” model was rolled out gradually by the Tax Authority, and the threshold requiring an allocation number decreases over the years. In any case · at NETO the allocation number is issued as part of the tax invoice-receipt immediately upon payment.

The fast track

Need an invoice right now? Pay by credit card

Payment by credit card crystallises the tax point immediately · so the tax invoice-receipt, including the allocation number, is issued the moment you pay, with no waiting. It is the simplest way to get the invoice that very moment.

Pay by card · send me a link Call us · 08-976-1874

Backed by law and the Tax Authority

Not “because we decided so” · these are the official confirmations

NETO's mechanism is not an internal decision · it is anchored in an auditing CPA confirmation and in official Tax Authority certificates. Here are the documents · open for review (the original documents are in Hebrew).

Auditing CPA confirmation

The VAT tax point

CPA Shoshana Weinberg confirms that the tax point of Bareket I.T Ltd follows section 29(1a) · liability arises upon the provision of the service, and the service is provided upon receipt of the consideration. Therefore a tax invoice is issued upon receipt of payment.

Open the confirmation (PDF, Hebrew) Tax Authority

Bookkeeping and withholding tax

A certificate of lawful bookkeeping and a withholding-tax certificate · in the name of Bareket I.T Ltd (515486058), valid, issued by the Tax Authority.

Open the confirmation (PDF, Hebrew) Bank confirmation

Bank account ownership

An ownership confirmation from the First International Bank of Israel (PAGI) · the payment account is registered in the name of Bareket I.T Ltd. Your payment goes to the company's own account.

Open the confirmation (PDF, Hebrew)

Quoted from the confirmation

What the CPA confirmation says

Hebrew original · binding text

״מנפיקה החברה חשבונית מס ללקוחותיה בעת קבלת התמורה שהינו מועד נתינת השרות וקיום עסקה על פי דין ... החברה עורכת את דוחותיה הכספיים ואת דוח המס שלה לפי בסיס מזומן ובהתאם להוראות תקן חשבונאות 34.״

Unofficial translation

“The company issues a tax invoice to its clients upon receipt of the consideration, which is the time the service is provided and a transaction exists by law ... the company prepares its financial statements and its tax return on a cash basis and in accordance with Accounting Standard 34.”

CPA Shoshana Weinberg · August 2025 · regarding Bareket I.T Ltd, company no. 515486058. Unofficial translation · the Hebrew original is binding.

For those who want the details

The full legal detail · section by section

Here is the full explanation · who may report on a cash basis, what the turnover thresholds are, and which amendments shaped the picture. Open only if you wish. Law quotes appear in the Hebrew original with an unofficial translation.

What is a “cash basis” and what is an “accrual basis”

Cash basis: the VAT liability arises upon receipt of the consideration, and only on the amount actually received. The invoice is issued accordingly · at the time of payment.

Accrual basis: the liability arises upon the provision of the service or the delivery of the goods, even if payment has not yet been received. Here the invoice may be issued before payment.

The default for services under section 24 is a cash basis. For larger businesses the law points to an accrual basis · and still, at NETO the liability arises upon the provision of the service, which is the moment the consideration is received, as the company's CPA has confirmed.

Section 24 · services · liability upon receipt of the consideration

Hebrew original · binding text

״בשירות חל החיוב במס עם קבלת התמורה ועל הסכום שהתקבל.״

Unofficial translation

“In a service, the tax liability arises upon receipt of the consideration and on the amount received.”

This is the basic rule for services · a cash basis.

Section 22 · sale of goods · liability upon delivery

Hebrew original · binding text

״במכר טובין חל החיוב במס עם מסירתם לקונה; נמסרו הטובין חלקים חלקים · חל החיוב על כל חלק...״

Unofficial translation

“In a sale of goods, the tax liability arises upon their delivery to the buyer; if the goods were delivered in parts · the liability applies to each part...”

For goods the rule is an accrual basis (upon delivery), unlike the rule for services · hence the important distinction between the two.

Sections 29(1) and (1a) · exceptions and the tax point

29(1): in certain transactions (for example, the sale of goods by small dealers under a turnover threshold, per the items in Addendum A to the Income Tax Instructions) · the tax liability arises upon receipt of the consideration and on the amount received.

Hebrew original · binding text

Unofficial translation

This is the section on which NETO's tax point is based · the liability arises upon the provision of the service, which is the moment the consideration is received (CPA confirmation).

Section 46 · an invoice within 14 days of the tax point

Hebrew original · binding text

״חשבונית תוצא תוך ארבעה עשר יום ממועד החיוב במס.״

Unofficial translation

“An invoice shall be issued within fourteen days of the tax point.”

Once the liability has arisen (the payment was received) · a legal duty arises to issue an invoice within 14 days.

Section 47(a1) · the buyer shall not demand an invoice before payment

Hebrew original · binding text

Unofficial translation

The provision (added in Amendment 42) was designed to prevent large clients from forcing a cash-basis dealer to issue an invoice before payment. For the binding text · see Nevo.

The amendments · 41 (2011), 42 (2012), 48 (2014)

Amendment 41 (5771-2011): anchored and regulated the tax points, including the case where amounts were paid on account of the consideration before the tax point.

Amendment 42 (5772-2012): added section 29(1a) (the tax point for services against a turnover threshold) and the protection in section 47(a1) · that the buyer shall not demand an invoice before payment.

Amendment 48 (5775-2014): extended the option to report VAT on a cash basis · among others to manufacturers and dealers in the recycling sectors, up to set turnover thresholds.

Members of the liberal professions, service providers and certain manufacturers/recycling dealers · are included in the cash-basis reporting arrangements, subject to the conditions and thresholds in the law and the regulations.

Legal clarification. The law sections above are provided for information and reading convenience only · they do not constitute legal or accounting advice and must not be relied on as such. The Hebrew sections were cross-checked against the official text of the Value Added Tax Law, 5736-1975 on Nevo. The translation is unofficial and the binding text is the one published in Reshumot · later amendments and updates are possible, and the turnover thresholds are updated from time to time. For any use · consult the official text and a certified public accountant or a lawyer.

Official explanation · a pro-forma invoice from a business reporting on a cash basis, before payment — Sample proforma invoice (chesbon iska) · Hebrew original

Confirmation that NETO reports VAT on a cash basis — CPA approval · official Hebrew document

The wording of the law

When does the tax point arise · as the law states

The rule for services in the Israeli VAT Law is a cash basis: liability arises upon receipt of the consideration. At NETO, the tax point is anchored in section 29(1a) · and the service is provided to the client upon receipt of payment. Below are the sections, each with a plain-language explanation alongside.

Section 24 · the tax point for services

Hebrew original · binding text

״בשירות חל החיוב במס עם קבלת התמורה ועל הסכום שהתקבל.״

Unofficial translation

“In a service, the tax liability arises upon receipt of the consideration and on the amount received.”

Official documents are in Hebrew · the binding originals

Frequently asked questions

Cash-basis business · questions and answers

I paid and did not receive an invoice in advance · is that a mistake?

No · that is the law. NETO reports VAT on a cash basis, so the tax point arises upon receipt of the consideration. A tax invoice-receipt is issued after the payment. Before the payment a pro-forma invoice or a payment demand is sent · a document that is not an accounting record and does not entitle you to deduct input VAT.

May a client demand a tax invoice before payment?

No. Section 47(a1) of the Israeli VAT Law provides that the buyer shall not demand a tax invoice before payment of the consideration, where the tax point of the transaction arises upon receipt of the consideration. The provision was designed to prevent powerful clients from conditioning payment on receiving an invoice in advance from a dealer reporting on a cash basis.

What is the difference between a pro-forma invoice and a tax invoice-receipt?

A pro-forma invoice (or payment demand) details the amount to be paid before it has been received · it is not an accounting document and does not allow input-VAT deduction. A tax invoice-receipt is the binding accounting document, issued by a cash-basis dealer upon receipt of payment · together with an allocation number (Israel Invoices) when required.

If I pay · when will I receive the invoice and the allocation number?

Immediately upon receipt of the payment. Under section 46, an invoice must be issued within fourteen days of the tax point · and in practice NETO issues the tax invoice-receipt with the allocation number very close to the moment of payment. Paying does not turn you into an invoice-chaser.

I need an invoice immediately · is there a solution?

Yes. Payment by credit card crystallises the tax point immediately, so the tax invoice-receipt is issued the moment you pay · with no waiting. It is the fastest way to receive an invoice with an allocation number that very moment.

On what basis does NETO operate this way?

The company's auditing CPA confirmed in writing that NETO's tax point follows section 29(1a) of the VAT Law · the liability arises upon the provision of the service, and the service is provided to the client upon receipt of the consideration and not before. Accordingly, the company issues a tax invoice upon receipt of payment and prepares its statements on a cash basis under Accounting Standard 34.

Why does this arrangement exist at all?

So that dealers are not required to pay VAT on money they have not yet received. A cash-basis business pays the VAT to the authority only after the money has come in · and, derived from that, issues the invoice at the same time. This protects the dealer and also prevents chasing invoices that have no payment behind them.

Is it fully legal? Can I deduct the VAT?

Yes, completely. The tax invoice-receipt issued upon payment is a full accounting document in every respect · with an allocation number when required, and it entitles you to deduct input VAT lawfully. The cash-basis reporting is backed by an auditing CPA confirmation and by the Tax Authority's bookkeeping certificates.

Summary

NETO is a dealer that reports VAT on a cash basis. The tax point arises upon receipt of the payment · so a tax invoice-receipt is issued upon payment and not before. Before the payment you receive a pro-forma invoice or a payment demand. Moreover · the law (section 47(a1)) forbids the client to demand an invoice before paying, and immediately after the payment the dealer must issue the invoice by law. The mechanism is backed by an auditing CPA confirmation and Tax Authority certificates · NETO, an automated employment platform, manpower-contractor licence 1565, operating since 2016.

Cash basis · the tax liability arises upon receipt of the payment (sections 24, 29(1a)).
Document order · before · a pro-forma invoice. After · a tax invoice-receipt with an allocation number.
Client protection · demanding an invoice before payment is forbidden (47(a1)); issuing it afterwards is mandatory (46).
Invoice now · pay by credit card · the invoice arrives that very moment.

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Notice: the information on this page is for enrichment and clarification only and does not constitute legal or accounting advice. The Hebrew law sections were cross-checked against the official text of the VAT Law on Nevo. The translation is unofficial and the binding text is the one published in Reshumot. Where needed, consult a certified public accountant or a lawyer.

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The fast track

Paid? Your invoice is already on its way

By law, the tax invoice-receipt is issued upon receipt of the payment · and with a credit card it arrives immediately, including the allocation number. Choose how to proceed.

Invoice now? Pay by credit card Ask on WhatsApp

The wording of the law

When does the tax point arise · as the law states

The rule for services in the Israeli VAT Law is a cash basis: liability arises upon receipt of the consideration. At NETO, the tax point is anchored in section 29(1a) · and the service is provided to the client upon receipt of payment. Below are the sections, each with a plain-language explanation alongside.

Section 24 · the tax point for services

Hebrew original · binding text

״בשירות חל החיוב במס עם קבלת התמורה ועל הסכום שהתקבל.״

Unofficial translation

“In a service, the tax liability arises upon receipt of the consideration and on the amount received.”

Official documents are in Hebrew · the binding originals

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Paid, but no tax invoice in advance?Not a mistake · it is the law · and here is why

In short