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The guide to
Ossek Patour
The Ossek Patour is the equivalent of the auto-entrepreneur in France. It is first and foremost an individual entrepreneur, registered as a commercial activity with the Maam (VAT in Israel).
- Who can register?
- How to avoid paying too much tax?
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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
Ossek mourche
In Israel, an Ossek Mourche is a sole proprietorship subject to VAT and standard tax regulations.
Find out more about ossek mourché >> (in French)
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
Simplified measures to get the Israel business up and running quickly.
The Ossek Patour benefits from a series of simplifying measures that enable him to carry out a small independent professional activity in Israel. They can do so easily, on a regular or occasional basis, while minimizing the administrative costs of registration and, above all, with full knowledge of the associated social security and tax charges in Israel.
An Ossek Patour must register with the VAT office in Israel.
So, rather than talking about "status", we can talk about an ultra-simplified "regime" for self-employment.
Nevertheless, as with any business, a certain number of rules apply. So it's a good idea to understand both the advantages and the limitations of the Ossek Patour system before deciding to set up your own micro-business.
An Ossek Patour can register directly with the nearest VAT office. It is not necessary to call in a chartered accountant to open a business.
However, given the complexity of dealing with the tax authorities in Israel, it is strongly recommended that you call on the services of specialists. You'll save time, money and security.
WHAT IS OSSEK PATOUR STATUS?
Does Ossek Patour have a legal status?
The answer is no. The Ossek Patour is first and foremost an individual entrepreneur, registered as such with the Maam. (VAT in Israel).
In other words, there's no legal separation between you and your company.
But what's new is that they benefit from a series of simplifying measures that enable them to carry out a small independent professional activity:
1. very easily,
2. on a regular or occasional basis,
3. by minimizing administrative costs,
4. and, above all, with full knowledge of the associated social security and tax charges.
Ossek patour = simplified set-up formalities + simplified social security system + no Maam (VAT) to pay.
What activities are involved?
Commercial activities can be carried out as Ossek patour, crafts and certain liberal professions, not exceeding a certain sales threshold. (107,692 Nis in 2023).
This sales figure is an annual ceiling. Not monthly. So if you open your status in June, you'll be able to bill 15,000 Shekels a month (for example) until the end of the year. This means you'll have invoiced 15,000*6=90,000 Shekels. You'll still be under the annual threshold. The following year, once you've exceeded the annual limit, you'll have to convert your business to a "ossek mourché".
Below is a table showing the authorized annual thresholds for recent years:
| Year | Annual limit in NIS |
|---|---|
| 2021 | 99 893 |
| 2016 | 99 006 |
| 2018 | 99 003 |
| 2017 | 98 707 |
| 2023 | 107 692 |
| 2022 | 102 292 |
| 2020 | 100 491 |
| 2019 | 100 187 |
| 2020 | 100 491 |
| 2019 | 100 187 |
Commercial activities.
Ossek Patour is open to anyone who buys goods, merchandise, etc. for resale or who sells certain commercial services: hotels, restaurants, shows, transport, etc.
Please note, however, that certain exclusions apply, in particular to property leased for commercial purposes.
Craft activities
In Israel, the term "craft" refers to any activity involving the manufacture, transformation or repair - on a one-off, not "mass-produced" basis - of products requiring manual intervention. These trades often require a professional qualification and certificate before they can be practiced.
Ossek patour must respect the obligations of their profession: required professional qualifications, professional insurance when compulsory (or strongly recommended), general regulations and professional technical standards...
Liberal professions
Liberal professionals can in part be Ossek Patour. Next, we'll look at companies that cannot be Ossek Patour.
Who can't be registered as an Ossek patour?
The list of companies unable to open as Ossek Patour is as follows:
1 - Professions such as :
- Architect
- Engineer
- Private detective
- Lawyer
- Chartered Accountant
- Doctor
- Management consultant
- Interpreter
- Insurance agent
- Psychologist
- Dentist
- Medical clinic
2 - The literary professions, such as :
- Teacher
- Professor at universities & Grandes écoles
- Examination corrector
- Authors
3 - Other business sectors :
- The director of a driving school
- Real Estate Agent
- School principal (including Gan for children)
- Car dealer.
If you work in any of the trades listed above, you must register as an Ossek Mourché at the VAT office.
What are Ossek Patour's tax responsibilities?
The Ossek patour is accountable to the Israeli tax authorities twice a year.
1 - Annual sales declaration.
- During the month of January following the fiscal year (calendar year: January 1 - December 31), the Ossek Patour must declare its sales for the previous year to the VAT office.
For example:
- In January 2023, you will have to declare the sales generated in 2022.
- If you opened your ossek patour in the middle of the year, for example in November 2022, you will need to declare the sales generated in November and December 2022.
2 - Annual tax return.
From March following the fiscal year (calendar year: January 1 - December 31), the Ossek Patour must submit an annual tax return to the tax authorities in Israel. This declaration must be submitted on form 1301.
For example:
In March 2023, you will have to declare all income earned in 2022.
This declaration takes into account:
- any salaries received (if you were an employee),
- rental income (if you had a rented apartment the previous year),
- your sales generated by your self-employed activity in Israel,
- your profit from your Ossek Patour.
Taxation for Ossek Patour
The word Patour in Hebrew means exempt. Many people make the mistake of thinking that Ossek Patour is tax-exempt. Ossek Patour is "Patour" with regard to Maam (VAT in Israel) only.
He is therefore liable for income tax (Mas ahnassa) as well as Bitouah Leoumi.
Needless to say, given the small annual amount allowed for an Ossek Patour (see above), the amounts of tax payable are relatively low. So an Ossek Patour with no other income in Israel, working 10 hours a week and billing 3,000 Nis a month, might not pay a single shekel in taxes a year. Nor any contributions to Bitouah Léoumi.
What are Ossek Patour's professional responsibilities?
The Ossek patour is first and foremost an individual entrepreneur responsible for his professional actions.
It must therefore :
1. assess occupational risks,
2. comply with the professional qualifications required for the exercise of its profession,
3. and take out the necessary insurance for the activity in question.
It is also required to comply with current legislation, in particular that relating to competition and consumer affairs.
Is taking out an insurance policy compulsory when you're an Ossek patour?
It all depends on your business!
Insurance can be an obligation:
1. imposed by law: this is the case, for example, for the liability of construction companies, for vehicles...
imposed by the texts governing the activity: this is the case, for example, for travel agencies...
2. That's why it's important to find out more about your business.
Even if your activity does not require you to take out insurance, don't neglect this step and think carefully about the risks you are taking:
1. you can cause an accident to a customer...
2. you can injure someone in front of your customer's home by opening your car door...
3. You may even injure yourself while carrying out work and remain immobilized for several weeks, or even months... The Bitouah 4. Leoumi doesn't always take care of everything.
a product you have sold may be defective and cause damage to one of your customers...
OTHER FREQUENTLY ASKED QUESTIONS
Some frequently asked questions about the status of Ossek Patour.
A - Is it possible to adopt the Ossek Patour regime for a short-term furnished rental activity? Yes, it is, provided your income does not exceed the annual threshold (as described above).
However, the micro-business regime is not always suitable for this activity. The Maam (VAT in Israel) paid for the initial work and the fitting-out costs cannot be recovered. These are often substantial costs.
Don't hesitate to consult our accounting firm in Israel, which specializes in tax optimization for short-term rentals.
In addition, the status of "loueur en meublé professionnel" implies specific conditions:
1. At least one member of the tax household must be registered with the Maam office as an Ossek patour in the capacity of manager.
2. Annual income from this activity must not exceed the annual limit for Ossek patour (see above).
3. If you are Ossek Mourche for another activity, you may not combine these activities and also be Ossek patour for the short-term rental activity.
B - I want to carry out several different activities. Can I create two Ossek Patour?
No, because the same individual cannot have two sole proprietorships. You can operate both businesses under the same Ossek patour, as long as they meet the above-mentioned criteria.
However, if you have two separate activities, and one of them does not allow you to operate as an Ossek Patour (e.g. insurance agent), you will not be able to register as an Ossec Patour at all.
You can't have 2 sole proprietorship statuses under the same tax entity: 1 Ossek Patour business and 1 Ossek Mourche business. You will therefore need to open an Ossek Mourche status for your 2 activities.
C - Can I practice a regulated activity as an auto-entrepreneur?
Yes, subject to compliance with the regulations governing the activity.
D - Can I offer both business and personal services?
Yes, there's no problem!
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