Key Takeaways
- Opening an Osek Patur file with the Israel Tax Authority costs nothing: you apply for free on the Tax Authority website or at a VAT office. A representative such as an accountant or tax adviser charges a professional fee for handling it, and if you open the file through Keep, you pay a one-time NIS 99 + VAT.
- The real costs are the side costs: an accountant's fees, if you use one (typically NIS 150-350 a month for an Osek Patur, as of September 2026), software for issuing documents, National Insurance advances and the costs of setting up the business itself.
- Osek Patur is a VAT status for a business with annual turnover of up to NIS 122,833 (for 2026). You do not charge clients VAT, but you pay VAT on business purchases and cannot deduct it.
- An Osek Patur files an annual income tax report (a micro business files a shortened one) and no periodic VAT reports. By 31 January it also files an annual VAT declaration of the previous year's turnover.
- At Keep, the Basic plan for an Osek Patur costs NIS 39 a month + VAT, and the Recommended plan, with a personal accountant for guidance and representation before the tax authorities, costs NIS 105 a month + VAT. There is no commitment.
What Is an Osek Patur?
Before diving into costs, let's understand what Osek Patur actually is. An Osek Patur is a VAT status for an individual's small business, with annual turnover of up to NIS 122,833 (for 2026). The major advantage of being an Osek Patur is that you do not add VAT to your prices, so a private client pays your price with no VAT on top. You are still registered with VAT and still pay VAT on your business purchases.
However, it's important to remember that there are certain limitations for Osek Patur businesses, such as restrictions on which types of businesses can register as exempt and the inability to deduct VAT on expenses.
Before you choose this status, check that your profession is not on the list of professions that register as an Osek Murshe whatever their turnover, under Regulation 13 of the VAT (Registration) Regulations. The list includes, among others, lawyers, accountants, engineers, architects, doctors, translators and real estate brokers. Anyone who expects annual turnover above the ceiling also registers as an Osek Murshe.
How Much Does It Really Cost to Open an Osek Patur?
The short answer is: not much. In fact, opening the file itself is free. You can easily do it through the Israel Tax Authority website or in person at a VAT office. You can also use a representative such as an accountant or tax adviser, who charges a professional fee for it. However, there are some associated costs to consider. First, what does not cost anything:
Approvals and Online Reporting: No Fee
Documents you may need after opening carry no government fee either: the Tax Authority issues a bookkeeping approval free of charge, and you can print it from its website. You do not need to buy a smart card to report to the Tax Authority online, because its online services also accept the username and password from your personal area. If an accountant handles these for you, what you pay is their professional fee, not a government fee.
Accountant
An Osek Patur files no periodic VAT reports, but does file an annual income tax report (a micro business files a shortened one), and by 31 January it files an annual VAT declaration of the previous year's turnover. That is why you may want an accountant who can guide you at the beginning, help you understand your obligations, plan your taxes properly, and manage your business accounting. Fees vary from office to office; the typical range is given at the end of this section, under Additional Costs.
Accounting Software
Accounting software can help you track your business income and expenses, generate invoices and receipts, and manage cash flow. There are free options as well as paid software that costs anywhere from tens to hundreds of shekels a month.
Business Bank Account
A business bank account helps you separate your personal finances from your business finances. Many banks market business accounts to self-employed people, sometimes with offers for new clients, so it is worth comparing fees and offers before you open one. An Osek Patur is not required to open a separate business account.
Additional Costs
Depending on your business type, there may be additional costs such as equipment purchases, office rent, advertising and marketing, logo design, and website development. It's important to plan these expenses in advance.
When you plan a budget, separate one-time costs from recurring ones. Each month you usually pay National Insurance advances based on the income you declared when you opened the file. An accountant's ongoing service for an Osek Patur typically costs about NIS 150-350 a month (as of September 2026), and many offices bill the annual report separately.
How to Save on Costs
- Open the file yourself - Opening the file is free and can easily be done online.
- Use free or affordable software - There are accounting software options suitable for small businesses.
- Choose the right accountant - Select an accountant who specializes in working with Osek Patur and can offer a fair price.
- Manage expenses efficiently - Careful tracking of expenses will help you save money and maintain business profitability.
- Take advantage of benefits - Check whether you are eligible for benefits and discounts for small businesses.
The biggest saving is not paying for what you can do yourself. The online Osek Patur application opens the VAT file and the income tax file together, and you can tick the option to open a National Insurance file too, so the request is passed on there. If you do not tick it, you register with National Insurance separately. When you compare accountants' quotes, ask in writing what the monthly fee covers: an Osek Patur files no periodic VAT reports, so there is no reason to pay for them.
Why Open an Osek Patur Through Keep?
At Keep, we understand the challenges of starting a new business, which is why we developed a platform that simplifies the entire process:
- File opening with the authorities - You can open the file yourself for free; if you prefer it handled for you, opening it through Keep is a one-time service at NIS 99 + VAT. After that, you issue receipts and other income documents without limit, on every plan.
- All your business data in one place - A dashboard with income, expenses and profit for any date range, on every plan.
- Personal accountant - On the Recommended plan (NIS 105 a month + VAT), for professional guidance and representation before the tax authorities.
- Time savings - Automatic document issuing and collecting payments from clients by credit card and bit, on every plan.
- Peace of mind - You can see which documents you issued, which payments came in and which clients still owe you money, on every plan.
It is worth knowing in advance that the annual report is not included in the monthly price; the Recommended plan offers it at a special price. There is no commitment, and you can switch plans at any time at no cost.
Important Tips for Osek Patur Businesses
- Keep all receipts and invoices - Organized documentation of all income and expenses is important for tracking and presenting to tax authorities.
- Keep personal and business money apart - A separate business account is not required, but keeping the money apart makes tracking and financial management easier.
- Check eligibility for grants and benefits - Support programs for small businesses exist, mostly state-guaranteed loans and subsidized business consulting; grants for an ordinary small business are rare and depend on eligibility.
- Consult with an accountant - An Osek Patur files an annual income tax report and an annual VAT declaration, and it is worth getting advice on proper tax planning too.
Keeping your documents is a legal duty under the bookkeeping rules, not just a recommendation. An Osek Patur keeps copies of the receipts it issues and a file of the expense documents it receives. Documents are kept for 7 years from the end of the tax year, or 6 years from filing that year's annual report, whichever is later.
Summary
Opening an Osek Patur is an important step toward realizing your business dream. The file opening itself is free, and with proper planning, you can keep associated costs low.
With Keep, you can have the file opened without handling the forms yourself, for a one-time fee, and then issue income documents, collect payments from clients and follow your business in one place, on every plan.
To get started without needless delays, prepare the documents you attach to the online application: a copy of your ID card, a bank confirmation for the account the business will use, and a lease if your business premises are rented. In the application you also declare your expected annual turnover. You must register no later than the day you start working, and in practice you issue your first receipt after the file is open, so it is worth applying well in advance.
Frequently Asked Questions About Opening an Osek Patur
How long does it take to open an Osek Patur?
The Tax Authority publishes no fixed processing time for the application. With the online application you get SMS and email updates at each stage, and you can check the status in the system. Once the application is reviewed and approved, the VAT and income tax files are opened; the timing depends mainly on the review and on whether all documents were attached.
Does an Osek Patur need a business bank account?
No. The opening application needs a bank confirmation for an account the business will use, but an Osek Patur does not have to open a separate business account. A separate account helps keep personal and business money apart, and if you open one, it is worth comparing fees and offers between banks.
Is the annual report included in an accountant's monthly fee?
Not always. Many accountants bill the annual income tax report separately, on top of the monthly fee. Published market ranges put it at roughly NIS 1,000-2,000 for a sole proprietor (as of September 2026). It is worth asking about this before you sign up with an accountant.
Does an Osek Patur pay tax advances?
For income tax, usually not: since 2024 a new Osek Patur who opens the file online is registered as a micro business by default unless they opt out, and most micro businesses are exempt from advances and pay the year's tax with the shortened annual report. National Insurance advances are paid monthly, based on the income you declared when you opened the file, and you can ask to update them when your income changes by at least 10%.
Do you need an accountant to open an Osek Patur?
No. No law requires an Osek Patur to hire an accountant, either to open the file or afterwards: you submit the online application yourself, and you can also file the annual report and the annual VAT declaration yourself. Hiring an accountant or tax adviser to represent you is optional, and you pay them a professional fee. If you want ongoing support, Keep's Recommended plan includes a personal accountant.
