The Osek Murshe Guide

Osek Murshe guide

Starting a business in Israel? What to know before opening an Osek Murshe, how to register your business in Israel and file your taxes. Let’s start with the basics:

What is an Osek Murshe?

How to register as an Osek Murshe?

What tax compliance is required from an Osek Murshe?

Does an Osek Murshe pay tax?

What are the legal responsibilities of an Osek Murshe?


What is an Osek Murshe?

The Osek Murshe is the equivalent of a sole trader or self-employed. It’s an individual who opens a business without forming a corporate entity e.g. a company or partnership.

An Osek Murshe must open a tax file and register with the Ma’am Office as a VAT registered business.

An Osek Murshe is similar to an Osek Patur. However, an Osek Murshe must charge VAT on it’s sales and it isn’t subjected to the same limitations as an Osek Patur.

The Osek Patur Guide

How to register an Osek Murshe

To register an Osek Murshe or a business in Israel, you must take the following steps:

  1. Register the business with the VAT department.
  2. Open a tax file with the Income Tax department.
  3. Update your status with Bituach Leumi.
  4. Register with an online approved invoicing software (or purchase a booklet)
  5. Set-up your pension fund.

An Osek Murshe can register directly with the nearest VAT office. It is not compulsory to appoint an accountant for the opening of the file.

However, as with any business, several rules apply. It is important to understand the advantages but also the limits of an Osek Murshe before deciding to embark on the registration process.

Given the complexity of dealing with tax administrations in Israel, it is strongly recommended that you use the services of an accountant. In the long run you will save time, money and aggravation.

What is the status of an Osek Murshe?

Does the Osek Murshe have the legal status of a corporate entity?

The answer is no. An Osek Murshe is an individual and is registered as such with the VAT Office. In other words, there is no legal separation between you and your business.

What is the difference between an Osek Murshe and an Osek Patur?

Both the Osek Patur and the Osek Murshe are self-employed businesses. The difference between them is the VAT registration status. Whilst an Osek Murshe is required to collect VAT on it’s sales, an Osek Patur is VAT exempt.

The Osek Patur was designed to allow the launch of small businesses without the need for too much compliance. So, the Osek Patur has an annual revenue threshold which it must not exceed. The Osek Murshe doesn’t have any revenue threshold limit.

What tax compliance is required from an Osek Murshe?

An Osek Murshe must submit reports to the Israeli Tax Office every two months and then a final return after the year end.

1: Bimonthly report

Income Tax Report – During the year, you need to make payments on account towards your estimated tax liability. To calculate how much you should pay, you submit a report of your total revenue for the two-month period. Your income tax pre-payment will be a specified percentage of your revenue.

VAT Report – This is a summary of all the VAT you have collected on your sales and all the VAT you’ve paid on your expenses and purchases. Depending on the circumstances, you’ll either need to make a payment to the VAT department, or you’ll receive a VAT refund.

2: Annual Tax Return.

From the month of March following the tax year (calendar year: January 1 – December 31), the Osek Murshe must submit to the Tax Office an annual tax return. This declaration must be submitted on a Form 1301 and must include all your incomes:

– Turnover and profit from your Osek Murshe
– Salaries received (if you were an employee)
– Interest and dividend income
– Rental income (if you owned a property which was rented to tenants)
– Any other income received


Does an Osek Murshe pay tax?

The profits of an Osek Murshe are subject to Income Tax and Bituach Leumi. Additionally, an Osek Murshe would need to collect VAT on its sales (there are some exemptions on VAT collection i.e. when the customer is outside of Israel). This is different to an Osek Patur which is not required to collect VAT on its sales. The word “Patur” in Hebrew means “exempt”. Many people are mistaken in thinking that the Osek Patur is exempt from taxes. However, it is ‘Patur ‘ only in respect of Ma’am (VAT) only.

Income tax calculator


What to do once you have registered your Osek Murshe

Once you’ve registered your Osek Murshe, make sure that you are issuing your invoices correctly. You must either purchase customised pre-printed invoice booklets or use Tax Authority approved online software. You can check the status of your chosen software here.

Keep your records in order and your reports submitted on time. To reduce your tax bill on your Osek Murshe, ensure to record all the expenses that you are allowed. 

Tax Deductible Expenses – What You Can Claim


Accountancy Fees - Osek Murshe package

Dray & Natco accountants offer an Osek Murshe compliance package for all types of businesses.

Our services include:

  • Bookkeeping,
  • VAT reporting,
  • Bi-monthly income tax reporting,
  • annual tax return,
  • Bituach Leumi compliance.

Our fees are calculated based on the size of your business and the level of work required by our team. Don’t hesitate to request a free quote – we’ll do our best to satisfy you.

Get a quote today


FAQ's on the Osek Murshe?

There are a few differences:

  1. Ma’am (VAT):
    • An Osek Patur does not charge Ma’am on its sales and cannot reclaim the Ma’am on its expenses.
    • An Osek Murshe must charge Ma’am on its sales. It can also reclaim the Ma’am on its expenses.
  1. Turnover Threshold:
    • An Osek Patur must have annual turnover below the specified threshold (120,000 NIS in 2024).
    • The Osek Murshe has no turnover threshold limit.

No, because the same individual cannot have two sole proprietorships. You will be able to practice in both businesses under the same Osek Murshe file.

For a married couple, each spouse can have their own Osek Murshe / Osek Patur.

No, there are no limits for an Osek Murshe. However, if an Osek Murshe has significant profits, you should consider opening a Corporate entity to reduce the legal exposure and taxation.

Yes. However, to be eligible to change from an Osek Murshe to an Osek Patur, your turnover for the two preceding tax years must have been below the threshold limit of an Osek Patur.

Yes. This is possible as short-term rentals require the registration of a business.

Yes, there is no problem, the Osek Murshe can provide services to both individuals and businesses anywhere on the globe!



Kanfei Nesharim 68. Merkaz Oranim.

Tel Aviv

31 boulevard Rothschild


Téléphone : 02 631 9000
Fax : 02 631 9005
Email : office@cpa-dray.com

Parler à des Experts

Vous avez d'autres questions ? Notre équipe est prête à vous aider


Nos dernières vidéos de fiscalité et expertise comptable

En partenariat avec :

Retrouvez nos derniers articles & conseils.

En partenariat avec :


Nos Bureaux en Israël

Notre cabinet se spécialise dans la comptabilité et la fiscalité israélienne, avec une expertise poussée sur les avantages accordés aux Olim Hadashim et à l’optimisation fiscale.

Nos Conseillers à Tel Aviv

Cabinet Expert comptable Israel
Adresse: 31 boulevard Rothschild, Tel-Aviv (Israël)
Téléphone: 03-9446635
Fax: 03-9494682
Email: office@cpa-dray.com

Nos Conseillers à Jérusalem

Cabinet Expert comptable Israel
Adresse: Kanfei Nesharim 68. Merkaz Oranim
Téléphone: 02 631 9000
Fax: 02 631 9005
Email: office@cpa-dray.com