As previously explained in this column, the Economic Efficiency Law (the budget law) enacted on July 14 will shortly require longer periodic VAT returns (usually monthly). The VAT returns will need to list every tax invoice in the period: issued or issuable to customers; issued by suppliers; and customs-import documents. Reportable details include: the invoice number; its "symbol" - to be determined by the VAT director; date, amount and tax thereon, registered number of the supplier or service provider; registered number of the purchaser; and customs-import document number where applicable. These returns will now be submitted online accompanied by an electronic signature. This will begin next year for some businesses and charities (see below). This is a big addition to business bureaucracy, and reporting systems will have to be adapted very soon. With this in mind, the Israel Tax Authority in August published a circular that clarifies a few things: Electronic signature The electronic signature will need to be officially approved and secured according to rules to be published on the Israel Tax Authority's Web site. Other clarifications Sales transactions of up to NIS 5,000 before VAT can be reported as one consolidated item. In the voucher box, enter the number of transactions. In the date box, enter the last date of the list. In the monthly summary, enter the last day of the month. Larger amounts must be segregated and the customer's VAT number must be noted so that the customer can claim the VAT back as input VAT. These rules also apply to cash tills. What about pesky petty-cash expenses? An item can appear a number of times even on the same date, provided that total VAT on these items does not exceed the higher of 2 percent of the input VAT or NIS 2,000. The voucher number will be the number of invoices in each item. If an invoice number is not known, enter zeroes (instructions will be issued regarding how to enter the supplier's number). If an invoice is wrongly entered, enter the same details as a negative item, then re-enter the invoice correctly. The same applies if a purchase invoice is reduced by a debit note. As for exported goods, enter the customs-export document number as the customer number, and enter the customs-export document date as the date. The voucher number will be the sales invoice number. Enter zeroes for the VAT amount. In the case of export services (not involving a customs document), enter nines as the customer number. What about mixed-rate transactions with part standard-rated (16.5%), part zero-rated or exempt? Enter the transaction in one go ("L/S entry") or in its constituent parts. Commencement dates When does all this begin? Initially, businesses with sales revenues in 2009 over NIS 4 million, which are required to keep double-entry accounts (under the bookkeeping rules in the tax regulations), must start the detailed online reporting commencing with the January 2010 VAT return. Charities and financial institutions must start complying with the requirements on July 1, 2010. Businesses that have sales revenues over NIS 1m. in 2010, or are required to keep double-entry accounts, must start the detailed online reporting commencing with the January 2011 tax return. Other businesses will need to do so commencing in 2012. As always, consult experienced tax advisers in each country at an early stage in specific cases. email@example.com Leon Harris is an international tax specialist at Harris Consulting & Tax Ltd.