Why registration matters from day one
Many French-speaking entrepreneurs start working before completing registration with Mas Akhnassa (מס הכנסה — income tax), Ma'am (מע"מ — VAT) and Bituach Leumi (ביטוח לאומי — National Insurance). This leads to penalties, audits and sometimes lost VAT recovery on early expenses.
The three authorities
Mas Akhnassa — income tax
Israel's tax authority assigns your file number, credit points (נקודות זיכוי) and progressive tax rates on profits (10%–50%).
Tip: if you are Oleh Hadash or returning resident, claim extra credit points and the 10-year foreign-income exemption at registration — mistakes here cost thousands of shekels.
Ma'am — VAT (17%)
VAT applies to Ossek Mourché (licensed sole proprietor) and Hevra Ba'am (Ltd). Ossek Patour (exempt) does not charge VAT while turnover stays under the annual cap (~120,000 ILS in 2025, indexed yearly).
Tip: open your Ma'am file before issuing VAT invoices, or you may pay output VAT without deducting input VAT on past purchases.
Bituach Leumi — social contributions
Self-employed and directors pay contributions based on taxable income or minimum amounts when profits are low.
Tip: plan monthly advances (מקדמות) from quarter one to avoid a year-end shock.
Choosing your status first
| Status | VAT | Revenue cap | Liability |
|---|---|---|---|
| Ossek Patour | No | ~120K ILS/year | Personal |
| Ossek Mourché | Yes (17%) | None | Personal |
| Hevra Ba'am | Yes | None | Limited |
Rule of thumb: new freelancers often start as Patour, then switch to Mourché when turnover exceeds the cap or clients require VAT invoices.
10-step launch checklist
1. Define status (Patour / Mourché / Ba'am) with a CPA.
2. Open a business bank account.
3. Register with Mas Akhnassa (form 5329 or CPA-assisted).
4. Obtain Ma'am number if Mourché or company.
5. Register with Bituach Leumi as self-employed or director.
6. Choose bookkeeping regime (double-entry or authorized).
7. Set up compliant invoicing (numbering, legal mentions, VAT).
8. Keep all records for 7 years.
9. Schedule tax and social-security advances.
10. Review status after 6 months.
Common mistakes
- Mixing personal and business accounts.
- Ignoring foreign income reporting obligations.
- Not reclaiming VAT on equipment, rent and travel.
- Underestimating Bituach Leumi the first year.
When to contact BNG & CO
A French-speaking firm in Tel Aviv secures Patour/Mourché/Ba'am choice and aligns Mas Akhnassa, Ma'am and Bituach Leumi from day one. Free initial consultation to build your roadmap.