אריאל מוכתר – רואה חשבון

Explanation and Clarification Regarding the New “Small Business” Status

Every independent business in Israel is classified for VAT purposes as either an Osek Patur (exempt dealer) or Osek Murshe (authorized dealer). Starting in 2024, under a new reform introduced by the Israel Tax Authority, anyone registered as Osek Patur or Osek Murshe can also register with the Income Tax Authority as a Small Business (Esek Zair). As of 2024–2025, if your annual turnover is below ₪120,000, you may be eligible for this status. The benefits include:

1. Deduction of normative expenses: 30% of your turnover without itemizing receipts.
2. Deferred tax payment: File a simplified annual report instead of monthly or bi-monthly payments.
3. No automatic capital declaration (Hatzharat Hon): Unlike regular businesses, unless requested by the Tax Authority.
4. No automatic advance tax payments: Streamlined and flexible tax obligations.
5. National Insurance (Bituach Leumi) contributions: Automatically recognized within the 30% expense deduction.
6. Pension savings tax credit: 35% credit on pension contributions for those with no other income source, capped at 5% of taxable income.
7. Option to submit a full annual report: To claim additional deductions (e.g., Hishtalmut funds for self-employed individuals).

Eligibility Requirements

Both new and existing businesses classified as Osek Patur or Osek Murshe can apply online at the Israel Tax Authority website at any time during the tax year (January 1 to December 25).

עצמאי שקיבל הכרה כ"בעל עסק זעיר" נדרש לדווח לרשות המיסים פעמיים עבור כל שנת מס:
1. דיווח במערכת תיאומי מס – ניתן לבצע את הדיווח במהלך כל שנת המס השוטפת, אך לא לאחר שהסתיימה. בדיווח זה שחייב להיות מוגש מה-1 בינואר ועד ל-30 בדצמבר – יבוצע חישוב שיעורי המס, בהסתמך על המחזור המשוער, הכנסות נוספות, הטבות מס, נקודות זיכוי וכדומה.
2. הצהרה לבעל עסק זעיר – דיווח על המחזור בפועל מה-1 בינואר ועד ה-31 במרס. בעקבות הדיווח העוסק יקבל חיוב וישלם את המס.

Restrictions on Eligibility

לעוסק זעיר לא תתאפשר יציאה וחזרה מהמודל שנה אחר שנה. מגבלה זו נועדה למנוע הסטת הוצאות בין השנים.

You are not eligible for Small Business status if:

1. You switched from salaried employee to independent service provider for your former employer.
2. You are a controlling shareholder in a company.
3. More than 25% of your income comes from a relative or former employer (as defined in Section 88).
4. You employ other workers.
5. You have income not derived from personal labor.

Our Services for Small Business Owners Include:

• Registering with all 3 tax authorities: VAT, Income Tax, and National Insurance.
• Representation before the tax offices.
• Initial estimation of expected income and notifying the authorities.
• Guidance on issuing receipts and tracking deductible expenses.
• Assistance with bookkeeping obligations.
• Issuing a VAT exemption certificate (Teudat Osek Patur).
• Obtaining certificates from Income Tax: exemption from withholding tax and proper bookkeeping approval.
• Optional single-entry bookkeeping.
• Updating status with National Insurance twice annually.
• End-of-year tax estimation to determine whether to file simplified or full report.
• Submitting the Osek Patur annual report to VAT Authority.
• Preparing and filing the full annual report to Income Tax including all relevant appendices
• Personalized advice on pension and savings plans eligible for tax benefits.Guidance on optimal pension and education fund contributions for tax benefits.

Service Cost

Pricing depends on the business activity level and the number of required reports.

You’re welcome to contact me for a custom quote tailored to your specific needs as a Small Business Owner.