Israeli Tax Authority — Self-employment registration: Osek Patur and Osek Murshe

Source: https://lawoffices.co.il/en/guide-to-taxation-in-israel · 2026

Establishing a self-employed venture in Israel requires understanding tax obligations and registration processes. There are two common forms of individual self-employment: Osek Patur and Osek Murshe.

Osek Patur (VAT-Exempt Individual Entrepreneur)

Osek Patur is designed for small businesses in Israel, offering simplified administration and reduced professional fees.

Eligibility:

• Annual turnover below NIS 120,000 (threshold applicable 2024–2026)
• Not available to certain professions: architects, lawyers, doctors, and teachers are NOT eligible

Key Benefits:

• Exempt from charging and collecting VAT (Value Added Tax) on sales
• Simplified administration and reduced reporting burden
• Direct registration with the nearest VAT office

Reporting Obligations:

• Semi-annual turnover declarations to the Israeli Tax Office
• Annual tax declaration to the Israeli Tax Office

Osek Murshe (Sole Trader with VAT Obligations)

Osek Murshe is a form of individual self-employment suitable for businesses with higher revenue or those in professions excluded from Osek Patur.

Key Features:

• No revenue ceiling — businesses can generate unlimited income
• Must charge and collect VAT on sales (currently 17%, rising to 18% from 1 January 2025)

Registration Steps:

1. Register with the VAT department
2. Open a tax file with the Income Tax department
3. Update status with Bituach Leumi (National Insurance Institute)
4. Register with approved invoicing software
5. Establish a pension fund

Reporting Obligations:

• Bimonthly reports on income tax and VAT
• Annual tax return

Key Differences: Osek Patur vs. Osek Murshe

Note: Professional guidance from a tax advisor (רואה חשבון) is strongly recommended to ensure compliance and identify available tax incentives for new immigrants.