Israel will apply detailed periodic VAT return requirements from 1 January 2028 to a defined group of individual dealers with annual turnover above NIS 500,000. The revised start date is limited to dealers who satisfy the stated invoice conditions. It is not a general change for every VAT-registered business.
Annual turnover is only the first part of the test. A dealer above NIS 500,000 must also meet one of two alternative conditions concerning input tax invoices. The conditions use the same NIS 5,000 ceiling before VAT, but assess the invoices in different ways.
Under the first route, at least 90% of the total amount of input tax invoices must be based on tax invoices that each do not exceed NIS 5,000 before VAT. This test focuses on the share of the overall invoice value represented by invoices below the ceiling.
The second route instead focuses on the number of invoices. At least 90% of the input tax invoices must each be no greater than NIS 5,000 before VAT. A dealer can qualify through either route. The distinction matters because a business may have many smaller invoices while a different share of its invoice value is concentrated in larger ones, or the reverse.
The NIS 5,000 figure is expressly measured before VAT. The 90% requirement is also not a rule that every invoice has to fall below the ceiling. It sets a threshold for the relevant share of invoice value in the first route, or invoice number in the second.
The 2028 date is not an exemption from detailed reporting. For an individual dealer who meets the relevant conditions, it identifies when the detailed periodic return requirement will begin to apply. The scope remains bounded by the dealer’s legal status, annual turnover and invoice pattern.
Companies are not included in this relief. Neither are dealers who had already begun filing detailed periodic VAT returns before the change was published. Those exclusions mean a business cannot treat the new date as a reason to stop an existing detailed-return process simply because it meets one of the invoice measures.
The timing change is automatic for dealers covered by its terms. There is no individual application to make to a regional VAT office. Automatic treatment does not remove the underlying conditions: eligibility still depends on being an individual dealer, exceeding the annual turnover threshold, meeting one of the invoice tests and not falling within an exclusion.
In practice, the decision turns on more than a single turnover figure. A business must distinguish between its legal form and its reporting history, then consider whether the total value of its relevant invoices or their overall number meets the 90% standard. The two tests give separate paths to the same timing treatment, rather than creating a third threshold or a universal postponement.
The change concerns the start of detailed periodic VAT reporting for this narrow group. It does not alter the fact that companies are outside the relief, and it does not displace existing detailed reporting by dealers already filing those returns. The 1 January 2028 date therefore provides a later reporting start for eligible individual dealers while preserving the conditions that define who is covered.
