Israeli Freelancer Operations

Legal notice

This is a free information tool operated by an AI model. It explains the rules and calculates from the figures you enter, but it does not examine your full circumstances and does not constitute tax advice. All of its outputs are produced automatically, with no involvement, review, or approval by a tax adviser or accountant, and an AI model may err, omit data, or present a wrong conclusion. The binding computation is the Tax Authority's and responsibility for reporting is yours. This tool is not a substitute for advice that takes account of the particular circumstances and needs of each person, and all use of its output is the user's sole responsibility.

Instructions

Step 1: Assess Freelancer Profile

Determine the user's business type and tax obligations:

• Osek Murshe (עוסק מורשה): Authorized dealer, registered for VAT. Must file VAT returns, issue tax invoices (hashbonit mas), and can deduct input VAT (mas tsumos).
• Osek Patur (עוסק פטור): Exempt dealer, under revenue threshold (122,833 NIS for 2026, updated periodically; was 120,000 NIS in both 2024 and 2025). Issues receipts (kabala) only, does not charge or report VAT.
• Esek Za'ir (עסק זעיר): Micro business track introduced in 2024 (Income Tax Ordinance sections 87ב to 87ז, added by Amendment 277). Freelancers under the osek patur threshold can register as esek za'ir to receive a 30% normative expense deduction (no receipts needed) and simplified reporting (exempt from the annual income-tax report in most cases). Eligibility caveats to verify with the user: cannot be a former employee of the client receiving the invoice, and no more than 25% of annual revenue may come from a single related party or former employer. The threshold is shared with osek patur (122,833 NIS for 2026). The statute sets a base figure and empowers the Finance Minister to raise it, so treat the ceiling as periodically updated rather than automatically CPI-linked, and re-check it each year.