The law requires companies to comply with a certain set of rules and standards established by the competent authorities.
The הוראות ניהול ספרים - Oraot Nihoul Sefarim, are management instructions for businesses that are required by law in Israel.
These instructions are divided into several categories:
- Management instructions that apply to all companies.
- Management instructions specific to each business sector.
As you can see, a doctor or a lawyer will not have the same instructions as a clothing store, for example.
Given the large number of business sectors in Israel, we won't go into detail here, but we advise you to consult our accounting firm to check whether there are any sector-specific instructions that apply to you.ALSO READ: A guide to doing business in Israel
Do you have a question?
How do I issue an invoice/receipt?
Israeli law requires you to issue a receipt - קבלה - every time you receive money (cash, bank transfer, check made out to you).
The VAT office in Israel (Maam - מעמ) likes to check whether companies are scrupulously complying with this specific instruction, and we know of several companies that have had to cease trading because of a few hundred Shekels that were cashed without issuing an immediate receipt.
What should I write in my counterfoil booklet?
In your invoice booklet (carnet à souche), here are the essential elements that must appear:
Upper part :
- Name of self-employed person or company, preceded by the self-employed person's title (lawyer, doctor) if available.
- Address (Company address or home address if you work from home).
- Phone number.
- Company registration number, preceded by the letters:
- ח.פ for a SARL.
- ע.ר for an amouta (non-profit association)
- Your Téoudate Zéoute number - (Identity number) for self-employed workers, preceded by the letters:
- ע.מ for an ossek mourche
- ע.פ for an ossek patour
In the section reserved for invoice details :
- Customer address
- Customer name
In the insert reserved for the service description:
- A description of the purpose of the invoice or receipt: for example - Collection for the month of January 2023.
- Amount excl.
- The amount of VAT
- Amount incl. VAT
In the section reserved for the means of payment :
- Cheque no.
- free text to insert other payment methods (bank transfer, cash, credit card).
Signature and date
What are the risks if I don't follow the management instructions?
It's important to point out that any company that fails to comply with these instructions exposes itself to what's known as a פסילת ספרים, which means the invalidation of its accounting books and a hefty fine.
The tax and VAT authorities will no longer accept your estimates and declarations, and will decide for themselves what your profit is.
This profit, estimated by the tax authorities in Israel, will be the basis for your tax obligations and your payment to the state.
In a nutshell
In other words, any company that fails to comply with these instructions will be faced with serious tax complications. מס הכנסהand the VAT office in Israel - מעמ .
Your questions - Our advice
- What's the risk if you don't issue the invoice or receipt on time?