- The Knesset Finance Committee approved further consideration of tax measures to reduce black capital.
- Transaction threshold will be reduced to 10,000 shekels before VAT from January 1, 2026, and to 5,000 shekels from June 1, 2026.
- Taxpayers exceeding the transaction threshold must obtain an allocation number to deduct input tax.
- Detailed VAT reports required for transactions over 500,000 shekels per year starting October 2025.
- Income tax deductions prohibited for expenses in invoices with denied allocation number requests starting August 2025.
- Deductions for income tax and VAT prohibited for expenses with financial sanctions due to cash use law violations starting January 2026.
Source: news.bloombergtax.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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