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  • Writer's pictureשוהם שאוליאן, רו״ח (עו״ד)

Detailed online VAT

Modern office setup with a computer screen displaying a detailed invoice reporting interface. The desk is organized with a keyboard, mouse, notebook, and decorative items like a small cactus and a potted plant, creating a calm and efficient workspace. The interface shows various financial metrics and graphs, indicating a comprehensive tool for managing business finances.

In the past, until January 1, 2016, businesses were required to submit VAT reports manually every month or every two months. However, in order to streamline this process, and especially as part of the Tax Authority's fight against "black money", legislation was enacted stipulating that from 2016 onwards, the reporting of some businesses in Israel will move to detailed online VAT reporting.

Unlike manual reports, online VAT reports are comprehensive, including all transactions carried out during the reporting period, often even if the transaction was not completed or the payment is pending. It is important to note that these reports also contain all details regarding input tax, which is offset against the transaction tax due to the Tax Authority. In fact, businesses are required to provide the Tax Authority with a detailed account of their income and expenses for each reporting period, obliging businesses to work in an organized and accurate manner with the authority.

VAT reporting obligations extend to a variety of business entities. This includes businesses that operate according to the double-entry accounting system as per the Income Tax Ordinance, as well as those whose annual sales turnover exceeds a certain threshold.

For the purpose of reporting, businesses must complete a registration process in the Tax Authority's system, or turn to an accountant to take care of the ongoing reports to the Tax Authority. Reporting is not voluntary, and non-compliance with legal instructions may result in fines and other punitive proceedings.


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