Disclaimer: This guide is general information only - not legal or accounting advice. Before you destroy any original documents, confirm the exact conditions with your accountant and against the official text of the regulations and Circular 9/2013.
In short: There are two different things here that are easy to confuse. Digitizing - scanning a document and keeping a digital copy - you do yourself, anytime, and it pays off today: organized, backed-up, searchable copies. Destruction - actually throwing the paper away - is a formal process with conditions (two approved electronic signatures, a proper archive) that runs through your bookkeeping software or accountant. For a small business: digitize everything now for convenience, and keep the paper for seven years. If getting rid of the paper matters to you - that's possible too.
Who this guide is for
- Business owners and the self-employed drowning in binders of invoices and receipts
- Accountants and bookkeepers moving clients to a digital archive
- Office managers considering a "paperless office"
- Foreign companies operating in Israel that need to know whether Israeli law allows destroying paper records
First: digitizing and destruction are two different things
This is where all the confusion starts - people think "scanning" and "throwing the paper away" are the same. They're not:
- Digitizing = making a digital copy. You scan a document, you save a file. The paper original stays with you. Anyone does this themselves, with no approval, anytime. The payoff: find a document in a second, a backup against fire or flood, and fewer binders on the desk.
- Destruction = destroying the paper original. Only here does Israel Tax Authority Circular 9/2013 and its conditions come in. "Destruction" (in Hebrew, bi'ur) is an orderly, authorized destruction - not just tossing it in the bin, and not a free-for-all. It is permitted only after you have met all the conditions.
The bottom line: you don't have to destroy anything to enjoy going digital. Most small businesses simply scan everything for convenience and keep the paper until seven years pass. Destruction is an extra step - not a requirement.
So - can you throw the paper away, or not?
Yes, with conditions. The Tax Authority has allowed (since 2013, Circular 9/2013) scanning documents you received, keeping only the file, and destroying the paper - but only if you've met a series of precise conditions. We'll go through them below; but first, the easy part - what you do yourself, today.
Which documents this applies to
The rules apply to documents you received from a third party - a supplier or a customer (officially, "external documentation"):
| Document type | Example |
|---|---|
| Receipts | A receipt from a supplier |
| Delivery / shipping notes | The note accompanying goods |
| Invoices | A regular invoice |
| Tax invoices | A supplier's tax invoice |
| Credit notes | A credit for a return |
| Purchase orders | A procurement order |
Documents you generated yourself by computer (e.g. invoices you issue to customers) can be kept digitally anyway, without any of this.
What you can do yourself - today
This is the easy half, and it needs no approval or special software. Four steps, all with our tools:
- Scan it readable and identical to the original. Every detail on the paper - numbers, stamps, signatures - should be clearly legible in the file. Any scanner, or a phone photo, is enough. Our document scanner captures, crops and auto-straightens.
- Make it searchable (OCR). A plain scan is really just an "image" of the page - you can't search a word in it. OCR (automatic character recognition) turns it into real text, so you can find a document by supplier name or amount. See making a scanned PDF searchable.
- Convert to PDF/A. This format ensures the file opens identically even seven years from now, because all the fonts are stored inside it. A regular file can "break" over time; PDF/A won't. See the PDF/A guide or go straight to the tool.
- Organize and back up. Save in sensible folders (by year and supplier), with a cloud or second-drive backup - not a single copy on one computer.
At this point you've already captured most of the value: an organized, searchable, backed-up digital archive. Even if you stop here and keep the paper - you're in great shape.
What it takes to actually throw the paper away
If you want to destroy the paper (not just keep a copy), the conditions of Circular 9/2013 kick in. Some are things you arrange, and some are things the software or your accountant arranges. Let's go through them one by one, in plain language.
What you (or the tools) arrange
- A readable file identical to the original - covered above.
- Storage in a secure, backed-up archive - "archive" is not some special government system. It's simply an organized place for the files, where you can find a document by type, date and supplier; that is backed up (not a single copy); and that is protected from accidental deletion or change. Well-organized folders with a cloud backup meet this.
What goes through bookkeeping software or an accountant
- Marking it "scanned document" and recording it in the books - the file must be flagged as a scanned copy (not a born-digital original), and the document must be recorded in the accounting system. This happens inside the software, not by hand on the PDF.
- Two approved electronic signatures - an "approved signature" is not a mouse signature; it's a signature backed by an official certificate from a licensed authority (such as Comsign or PersonalID). You need two: yours (that the original was scanned in full) and a second person's, who checked each file is identical to the original. The key point: many bookkeeping systems already include the marking and the signatures, so if you have such software, it does this for you. If not - your accountant can, or it's simpler to just keep the paper.
And the "gate" conditions - when destruction is allowed at all
You may destroy paper for a given tax year only after:
- The annual return for that year has been filed (the return under section 131).
- The withholding report (Form 856 - the report on amounts withheld from employees and suppliers) has been filed.
- Your books are in order ("admissible") - i.e. the accounting was not disqualified.
- You were not convicted of tax offences.
Missing even one condition? You may not destroy it - keep the paper.
The simple path for a small business
If all this sounds complicated - that's fine, because usually you don't actually need to destroy anything. The practical recommendation:
- Digitize everything now (the four steps above) - so you work digitally from today, find anything in a second, and have a backup.
- Just keep the paper until seven years pass. Keeping it costs almost nothing and asks nothing of you.
- Only if the paper is genuinely in the way (no room, an office move) - then it's worth destroying: check whether your bookkeeping software supports compliant archiving with signatures, or ask your accountant to set up the process.
That way you get all the benefit of going digital, without getting tangled up in approved signatures, and without exposing yourself in a tax audit.
What you must still keep
- The digital file itself, for the full retention period (seven years from the end of the tax year, or six from filing, whichever is later).
- Any paper that did not pass the full destruction conditions - if you didn't sign and didn't meet the conditions, the paper is still mandatory.
- Document types not covered by "external documentation" - when in doubt, ask your accountant.
Common mistakes
- Assuming scanning = allowed to throw away. Scanning alone is digitizing, not destruction. Without the signatures and conditions, the paper is still mandatory.
- Destroying paper before the year's reports are filed. Even if you scanned and signed, you may not destroy until the annual return and withholding report for that year are filed.
- A file that won't open in five years. A proprietary format or a re-compressed JPG may fail to open. That's why PDF/A.
- A single copy with no backup. One archive with no backup is a risk; losing the file means losing the records.
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Frequently Asked Questions
What's the difference between 'digitizing' and 'destruction'?
Digitizing = scanning a document and keeping a digital copy; the paper original stays with you. Destruction (in Hebrew, bi'ur) = destroying the paper original. Anyone can digitize themselves, anytime, with no approval. Destruction is permitted only after you meet every condition in Israel Tax Authority Circular 9/2013. You do not have to destroy the paper to enjoy the benefits of going digital.
Can I throw away a paper invoice after I scan it?
Scanning alone is not enough. To legally destroy (bi'ur) the paper you must meet every condition in Circular 9/2013: a readable file identical to the original, marking it as a 'scanned document', two approved electronic signatures, a proper archive, and the required reports for that year filed. Some of these (the marking and the signatures) happen through your bookkeeping software or accountant, not by hand. But note: you don't have to destroy it - you can simply scan, keep a digital copy, and keep the paper original.
I'm a small business - can I do this myself?
The digitizing - absolutely, yourself and with no approval: scan, run OCR, convert to PDF/A, and back up. The destruction part (shredding the paper) - the marking and the approved signatures go through bookkeeping software (many already include this) or your accountant. The simple path for most small businesses: digitize everything for convenience, and keep the paper for seven years.
Which documents does this apply to?
Documents you received from a third party - a supplier or a customer (officially, 'external documentation'): receipts, delivery notes, invoices, tax invoices, credit notes, and purchase orders. Documents you generated yourself by computer (e.g. invoices you issue to customers) can be kept digitally anyway.
What is an 'approved electronic signature'?
It is not a mouse signature or typing your name. 'Approved' means a digital signature backed by an official certificate from a licensed authority (such as Comsign or PersonalID). Destruction needs two: yours, confirming the original was scanned in full, and a second person's, who checked each file is identical to the original. Many bookkeeping systems include these signatures, so you don't handle it by hand.
How long must I keep the digital file?
Seven years from the end of the tax year, or six years from filing the return for that year, whichever is later (section 25). If you destroyed the paper, the digital file replaces it for the whole period, so it must stay accessible, backed up and readable.
What format should I store the files in?
PDF/A is recommended - a format built for long-term preservation: all fonts are stored inside the file so it opens identically years from now. We have a dedicated guide and tool for converting to PDF/A.