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The guide to
Ossek Mourché
Ossek mourché is the equivalent of a sole trader or self-employed person.
An Ossek Mourché is similar to an Ossek Patour, but it must charge VAT on its sales and is not subject to the same limitations as an Ossek Patour.
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Ossek Patour, Ossek Mourché, Hevra Baam
Osek Patur
Ossek Patour is a VAT-exempt status for small businesses.
Low costs, but very limited turnover
Find out more about ossek patour>>
Ossek mourché
In Israel, an Ossek Mourche is a sole proprietorship subject to VAT and standard tax regulations.
Find out more about ossek mourché>>
Hevra Baam
In Israel, an LTD (Limited) company is the equivalent of a limited liability company. It protects the personal assets of shareholders against the debts of the company.
Find out more about hevra baam>>
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Osek Patur
Owner managed business (small)
✅ No VAT payable
❌ No VAT to recover
✅ Light administrative structure
✅ Limited management fee
❌ Limited to 100K ILS per year of sales
❌ Status prohibited for certain professions
❌ Direct liability
✅ Ability to hire staff
Osek Murshe
Self-employed
contractor (with VAT)
❌ VAT payable
✅ Recoverable VAT
✅ No AC limitation
❌ Direct liability
✅ Ability to hire staff
Chevra Ba'am (Corporation)
Limited Company
LLC
❌ VAT payable
✅ Recoverable VAT
✅ No AC limitation
✅ Limited liability
✅ Ability to hire staff
✅ Possibility of having associates
❌ Higher management fees
❌ More cumbersome administrative structure
✅ More attractive for tax purposes if +500K ILS sales / year
Let's start with the basics:
1. What is an Ossek Mourche?
2. How do I register as an Ossek Mourche?
3. What tax compliance is required for an Ossek Mourche?
4. Does an Ossek Mourche pay taxes?
5. What are the legal responsibilities of an Ossek Mourche?
What is an Ossek Mourche?
Ossek Mourche is the equivalent of a sole trader or self-employed person. He or she is an individual who opens a business without forming a legal entity, such as a company or partnership.
An Ossek Mourche must open a tax file and register with the Ma'am as a VAT-registered company.
An Ossek Mourche is similar to an Ossek Patour. However, an Ossek Mourche must charge VAT on its sales and is not subject to the same limitations as an Ossek Patour.
This article is about the Ossek Mourche guide. Click on the link below to discover the Ossek Patour guide.
How do I register an Ossek Murche in Israel?
To register an Ossek Mourche in Israel, follow these steps:
1. Register the company with the VAT department.
2. Open a tax file with the income tax department.
3. Update your status with the Bitouah Leumi.
4. Register with an approved online billing software (or purchase a billing book).
5. Contribute to a pension fund.
An Ossek Mourche can register directly with the nearest VAT office.
However, as with any business, several rules apply. It's important to understand both the advantages and limitations of an Ossek Mourche before deciding to embark on the registration process.
Given the complexity of dealing with the tax authorities in Israel, it is strongly recommended to use the services of a certified public accountant in Israel.
What is the status of an Ossek Mourche?
Now, in the Ossek Mourche guide, we'll look at the legal status of Ossek Mourche.
Is Ossek Mourche a legal entity?
The answer is no. An Ossek Mourche is a private individual and is registered as such with the VAT office. In other words, there is no legal separation between you and your business.
What's the difference between an Ossek Mourche and an Ossek Patour?
Ossek Patour and Ossek Mourche are companies with self-employed status in Israel. The difference between them is their VAT registration status. While an Ossek Mourche is obliged to collect VAT on its sales, an Ossek Patour is exempt from VAT.
The Ossek Patour was designed to enable small businesses to start up with less red tape.
The Ossek Patour has an annual income threshold that must not be exceeded. Ossek Mourche has no income threshold.
What tax compliance is required of an Ossek Mourche?
An Ossek Mourche must submit reports to the Israeli tax office every two months, then a final declaration after the end of the year.
He must also declare his self-employed status to the Bitouah Léoumi.
In this guide to the Ossek Mourche, we have decided to detail all the different types of sampling:
1 : Tax & VAT returns every 2 months.
Income tax report - During the year, you have to pay instalments towards your estimated tax liability. To calculate how much you should pay, you submit a report of your total income for each two-month period. Your income tax prepayment will correspond to a percentage of your income.
VAT report - This is a summary of all the VAT you have collected on your sales and all the VAT you have paid on your expenses and purchases. Depending on the circumstances, you will either have to make a payment to the VAT department, or you will receive a VAT refund.
Keep your records in order and your reports submitted on time. To reduce your tax bill on your Ossek Mourche, be sure to record all expenses allowed to you.
2: Annual tax return.
From March following the fiscal year (calendar year: January 1 - December 31), Ossek Mourche must file an annual tax return with the tax authorities. This declaration must be submitted on form 1301 and must include all your income:
1. Sales and profit of your Ossek Mourche.
2. Salaries received (if you were an employee).
3. Interest and dividend income.
4. Rental income (if you owned a property that was rented to tenants).
5. Any other income received.
6. Ditto for your spouse.
Does an Ossek Mourche pay taxes?
The profits of an Ossek Mourche are subject to income tax and Bitouah Leoumi. In addition, an Ossek Mourche should collect VAT on sales made in Israel. (There are certain exemptions on VAT collection, i.e. when the customer is outside Israel).
This is different from an Ossek Patour, who is not required to collect VAT on his sales. The word "Patour" in Hebrew means "exempt". Many people are mistaken in thinking that Ossek Patour is tax-exempt. However, it is "Patour" only as far as VAT is concerned.
We've set up a tax simulator on our website, so you can run your own simulations and measure the tax implications for your business.
What to do once you have registered your Ossek Mourche
Once you've registered your Ossek Mourche, make sure you're issuing your invoices correctly. You'll either need to buy customized pre-printed invoice books, or use online software approved by the tax authorities. You can check the status of the software by clicking here.
We would like to remind all our readers that we have a French invoicing software.
Fill in the form below to get your free 90-day trial.
Accounting fees - Ossek Mourche package
- Register your company with the Israeli tax authorities.
- Bookkeeping in accordance with Israeli tax legislation.
- VAT declaration every month / 2 months.
- Bimonthly income tax returns with ongoing tax optimization monitoring.
- Annual tax return (Form 1301 / 6111).
- Declaration and follow-up with the Bitouah Leoumi.
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