Here is a summary of key changes involving social security for recent US arrivals and invoice procedures affecting nearly all Israeli businesses.

Exemption from national insurance for US olim:

The National Insurance Law Amendment 262 introduces measures to reduce overlapping social security payments for new immigrants from the United States. This update runs from the start of 2026 through the close of 2035 and may be prolonged until 2045.

Qualifying Israeli residents can skip Israeli national insurance payments on wages and self-employment earnings for five years when they already contribute to the US system. Coverage extends to those who arrived via the Law of Return or hold an official aliyah certificate. Retirement benefits continue uninterrupted under the exemption.

Passive investment income remains liable for national insurance contributions in most cases.

Analysis and limitations:

Although a tax treaty exists between Israel and the United States, no full social security totalization agreement is in place. The new rule offers a one-sided solution that can waive only Israeli obligations. Comparable totalization treaties already link Israel with numerous other nations including Canada, France, Germany, and the United Kingdom.

Individuals who made aliyah before 2026 fall outside the amendment scope. Immigrants from countries such as Australia or South Africa receive no similar relief. Employer national insurance contributions stay mandatory regardless of the exemption.

Payroll systems and self-employed procedures will require adjustments. Software providers must update their platforms, while individuals may seek refunds after year-end or modify direct debit arrangements with the National Insurance Institute.

Allocation numbers required for tax invoices

Beginning June 1, 2026, businesses issuing invoices above NIS 5,000 before VAT must obtain an official allocation number from the Israel Tax Authority. This extra identifier helps verify that VAT has been properly reported and paid.

The previous threshold stood at NIS 10,000. Approved accounting software will usually generate the number automatically. The goal is to block fraudulent input VAT claims by ensuring sellers secure the number and remit tax before buyers can deduct it.

Registration and obtaining numbers

Freelancers must register through their personal online area. Companies follow a structured process starting with the primary director or an authorized representative who supplies formal confirmation of authority. Once registered, authorized users can request numbers for a set period, typically up to one year.

Most users will rely on compatible software for instant allocation. Retroactive requests remain possible within one year, or customers may apply a reverse charge in certain situations.

The requirements cover only business-to-business transactions. They exclude consumer sales, imports, exports, zero-rated or exempt supplies, credit notes, and charities. Professional tax advice should be sought for individual circumstances.