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Complete guide to opening an ossek in Israel.
When you want to open an ossek in Israel, whether it's an Ossek Patour or an Ossek Mourché, there are several steps to follow. We'd like to make it clear from the outset that all these steps can be carried out by a chartered accountant in Israel, which will often save you time and avoid serious headaches with the tax authorities in Israel.What are the mistakes to avoid? What steps need to be taken? We tell you!
Open your Ossek with the tax authorities.
To open a ossek in Israel, you need to open a tax file with three different institutions:
Maam - VAT office in Israel,
Mas Ahnassa - Income tax,
Bitouah Leoumi - Social security in Israel.
We are now going to detail the opening with these 3 organizations.
A. Open a file at Maam - VAT Office in Israel.
First of all, you need to go to the Maam office corresponding to your activity. There are several Maam stations, depending on where you do business. In Tel Aviv, for example, there are 4 different Maam stations. Would you like to know which Maam you belong to? Don't hesitate to contact us.
To register as a Ossek Mourcheyou must provide:
1. Form 821, which is an application to open a tax file. It can be downloaded from tax administration website or obtained locally.2. identity card or driving license or passport.3. photocopy of a cheque or confirmation of a bank account. Photocopy of a cheque or confirmation of the opening of a bank account.It is possible to use a personal account, but it is generally preferable to open an account for business purposes only.This is important in terms of order, smooth operation and cash control. This is particularly important for those who intend to write off bank charges as overheads.4. Rental agreement if you are renting premises for commercial purposes.
In some cases, additional documents may be required:
1. If a profession is authorized, a professional license must be attached, e.g. doctor, lawyer, accountant, architect, mediator, etc.2. Trucking - truck ownership.3. Construction work - agreement / contract with customer.4. Cab driver - driver's license, transfer of ownership, lease number.
To register as a Osek Paturyou must provide:
1. Form 821, which is an application to open a tax file. It can be downloaded from tax administration website ID card or driver's license or passport.3. Rental contract if you are renting commercial premises.
Please note: some trades cannot be registered as Ossek Patour. Consult the list here
Registration is immediate and takes place on site. At the end of your appointment, you'll receive an Ossek Mourche or Ossek patour certificate. You can then start billing.
This is when you start doing your tax returns.
Important note - Do not start any commercial activity before opening your Maam file (VAT in Israel).
If your business requires you to incur expenses before you can start up, remember to open a VAT file in Israel. Otherwise, the authorities may refuse to recognize certain expenses. Have you already incurred costs before opening your business?Rest assured, there is a concept of a company under construction (i.e., before the tax file is opened). Our firm specializes in this type of request. Do not hesitate to Contact us to submit a request of this type.Read also: How to manage your business according to the law. Oraot Nihoul Sefarim.
B. Opening of a file at Mas Ahnassa.
Once you've opened your Ossek, you're obliged to open a Mas ahnassa (income tax) file, as you'll now have to file an annual tax return.You'll need to fill in form 5329 and send it to the tax office. You don't necessarily have to go anywhere to do this. Immediately after the tax opening, we recommend that you apply to the person in charge of your file for an exemption from withholding tax Usually, during the first six months of business, most tax assessors do not grant a full exemption (the construction sector in particular, as well as the consulting sector, can also have difficulties).If you have a chartered accountant, he or she will find it easier to negotiate your exemption. He or she is more at ease with the tax authorities and necessarily has a better grasp of this aspect of negotiation.
Opening an employer file in Israel .
If you intend to hire employeesThe Mas Ahnassa will open a withholding tax file for you (תיק ניכויים) and will immediately transfer the file to the Bitouah Leoumi to open an employer file for you.It is not necessary to submit a separate request to Bituah Leumi, this is done automatically.
You will later receive an employer's declaration form from the Bitouah Leoumi, which must be completed and returned to the institution by post.
C. Open a file at the Bitouah Leoumi as an Ossek in Israel.
You will need to complete form 6101 and fax it to the Bitouah Leoumi to which you belong (again, depending on the address of your business or residence). Very, very important!
- Submit the above application as soon as you start work. As long as you have not opened your file with Bitouah Leoumi, you are not covered by work accident insurance.
- What is written on the form will determine your status at Bitouah Leoumi(self-employed or self-employed who do not meet the definition). As well as monthly contributions that you will have to pay and the amount of pension to which you will be entitled, if applicable to Bitouah Leoumi!
If the registration with the Bitouah Léoumi has not been done, or has not been done correctly, you risk :
- not to receive compensation for work-related accidents, maternity leave, milouim, retirement pension!
- end up with a tax reassessment once your tax return has been filed with the authorities.
- receive an infinitely smaller pension or compensation than you would have been entitled to if you had applied correctly.
In conclusion: Call in a professional.
As the French saying goes, "un homme averti en vaut deux" ("an informed man is worth two").
We strongly recommend that you consult a professional before opening your Ossek in Israel.Because in the end, cheaper can cost a lot more!!!!
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