The Most Frequently Asked Questions About The Esek Patur

The Most Frequently Asked Questions About The Esek Patur

So you’ve registered your new business as an Osek Patur, now what?

Well, its time to start finding answers to your questions – the one’s which you may not have thought of when your registered.

We’ve compiled our answers to the most frequently asked questions about the Osek Patur for your benefit.

There are a few differences:

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.

Turnover Threshold:
An Osek Patur must have annual turnover below the specified threshold (100,491 NIS in 2020).
The Osek Murshah has no turnover threshold limit.

The word “Patur” in Hebrew means “exempt”. Many people are mistaken in thinking that the Osek Patur is exempt from taxes. The Osek Patur is ‘Patur’ only in respect of Ma’am (VAT) only.

However, it is taxable for Mas Hachnasa (Income Tax) as well as for Bituach Leumi (National Insurance).

Yes. An Osek Patur must submit a return twice a year to the Tax Office.

• Declaration of turnover – to be filled by the end of January following the tax year.
• Annual tax return – detailing all income of the individual to be filled form the month of March following the tax year.

No, because the same natural person cannot have two sole proprietorships. You will be able to practice in both areas under the same Osek Patur file, provided that together they meet criteria mentioned above.

However, if you carry out two distinct activities and one of them does not allow you to practice as an Osek Patur (insurance Agent for example), you cannot be registered as an Osek Patur at all.

Yes, there is no problem! You’re not limited in any way with who your customers can be. 

Yes. However, to be eligible to change from an Osek Merushe 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 if the receipts do not exceed the annual threshold (seen previously).

However, the Osek Patur regime is not always suitable for this activity, as the Maam (VAT in Israel) paid for the initial work and the development charges cannot be recovered. These are often significant costs.

In addition, the status of professional furnished rental company implies specific conditions:
• At least one member of the fiscal household must be registered with the Maam office as an Osek Patur as manager.
• The annual income from this activity must not exceed the annual limit of the Osek Patur (see above).
• If you have a registered Osek Mourshe for another activity, you will not be able to also be Osek Patur for the short-term rental activity.

If you found this useful you should read our Esek Patur Guide.


If you have more questions, Don’t hesitate to consult our chartered accountants who will be more than happy to give you the answers your looking for.

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