If you are here, you are probably on your way to becoming self-employed in Israel. It is an exciting decision full of opportunities, but it also requires navigating some bureaucratic processes. One of the first and most important steps in setting up your business is opening an income tax file with the Israel Tax Authority. The good news? If you are an Osek Patur, you can now open the file online, without leaving your home.
Key Takeaways
- An Osek Patur opens an income tax file online on the Israel Tax Authority website, with one application that opens both the income tax file and the VAT file, and in which you can also tick the option to open a National Insurance file. An Osek Murshe opens the file through a representative, such as an accountant, or at the regional VAT office.
- The online application is for anyone whose expected annual turnover is up to 122,833 NIS (as of 2026) and whose occupation is not one that requires Osek Murshe registration (such as law, accounting, engineering and medicine).
- With the online application you attach a copy of your ID with its supplement, a bank account confirmation and, if the business premises are rented, the lease agreement.
- No new file number is issued: a self-employed person's dealer number is their ID number.
- After opening the file you file an annual income tax return and pay National Insurance advances. An Osek Patur files only an annual turnover declaration with VAT, by 31 January, and most micro-business owners are exempt from income tax advances.
Why Do You Need to Open an Income Tax File?
Anyone who starts working as a freelancer, whether as an Osek Patur (Exempt Dealer) or Osek Murshe (Licensed Dealer), is required to report their income to the Israel Tax Authority. Opening an income tax file is the first step in this process, and it allows you to operate your business legally and avoid sanctions or fines in the future.
Beyond the legal requirement, opening an income tax file provides important benefits:
- Issue proper invoices -- You can issue official invoices to clients
- Maintain proper records -- Income and expenses are documented in an organized manner
- Tax benefits -- Tax refunds, deductions, and allowances available to freelancers
- Work with businesses -- Companies and institutional bodies require proper invoices and receipts (only an Osek Murshe may issue a tax invoice)
- Access to financing -- Business loans and financial assistance usually require a registered file
Operating a business without an open file can lead to serious problems: fines, retroactive tax charges, and even difficulty obtaining loans or financial assistance.
The duty also applies to employees who start freelance work alongside their job, such as private lessons or graphic design in the evenings. In that case you open a file as self-employed, and your annual return reports both your salary and your business income.
How to Open an Income Tax File Online
In the past, opening a file required a physical visit to income tax offices, but today the process has become much simpler and more convenient. An Osek Patur can do everything online, with no lines and no paper forms: one online application opens both the income tax file and the VAT file. An Osek Murshe opens the file through a representative (an accountant, tax adviser or lawyer) or at the regional VAT office. Here are the steps of the Osek Patur online application:
Step 1: Visit the Tax Authority Website
The Israel Tax Authority website has a dedicated service for opening an Osek Patur file, allowing you to complete the entire process online without visiting an office. You log in to the Tax Authority's digital services to use it, and you can submit the application at any time convenient for you, except during occasional system maintenance.
Step 2: Fill in Your Personal Details
Enter your personal information: full name, ID number, business address, and type of economic activity. Pay attention -- choosing your occupation type is particularly important, as it determines whether you may register as an Osek Patur or must register as an Osek Murshe, and which books you must keep.
Step 3: Attach Documents
Upload the required documents digitally -- a copy of your Israeli ID with supplement, a bank account confirmation from your bank, and a lease agreement (if the premises your business operates from are rented). Make sure the files are clear and readable.
Step 4: Submit Your Application
After filling in all details and verifying that your documents are in order, submit the application through the online system. It is recommended to double-check that all details are accurate to prevent delays.
Step 5: Receive Registration Confirmation
Once a Tax Authority office has processed the application, you will receive confirmation that your file is open (updates are sent by SMS and email). From then on, you are registered as a self-employed business. Your dealer number is your ID number, so no new file number is issued.
The online service is for anyone who can be an Osek Patur: expected annual turnover of up to 122,833 NIS (as of 2026), and an occupation that is not on the list of professions that must register as an Osek Murshe, such as law, accounting, engineering, medicine and real-estate brokerage. If you do not meet these conditions, you register as an Osek Murshe, even if you are just starting out.
Documents to Prepare in Advance
To ensure the process goes smoothly, prepare the following documents before you begin:
- Copy of Israeli ID with supplement -- A basic document required for any registration
- Lease agreement -- If the premises your business operates from are rented
- Bank account confirmation -- A letter from your bank confirming the account the business will use
- Estimated annual income -- Your projected revenue for the first year
In some cases, the Tax Authority may request additional documents depending on your business activity. The Osek Patur online application also opens the VAT file, and you can tick the option in it to open a National Insurance file too. An Osek Murshe submits Form 821 to open the VAT file and Form 5329 to open the income tax file, and should make sure National Insurance has been notified too, to avoid unexpected charges.
An Osek Murshe also submits a completed, signed Form 821 and attaches proof of expected activity, such as an agreement with a client, an invoice for equipment bought for the business or a professional certificate. A sole trader does not need a separate bank account for the business: an account in your own name is enough, and a joint account with a spouse is accepted if you both sign a declaration that it will also serve the business.
What Happens After Opening Your File?
Opening your file is just the beginning. After your business is registered, it is important to continue managing it properly:
- Track income and expenses -- Ongoing documentation of all financial transactions
- Issue proper invoices -- For every service or product you provide
- Report on time to authorities -- An annual income tax return and VAT reports (an Osek Patur files only an annual turnover declaration with VAT, by 31 January)
- Pay advance payments -- To National Insurance, based on the income you declared, and to income tax, as a percentage of turnover set by the assessing officer. Most micro-business owners (annual turnover up to 122,833 NIS, as of 2026) are exempt from income tax advances
- Manage cash flow -- Control business expenses and income
Organized management from day one will save you many headaches down the line, especially during annual report filing season.
A new Osek Patur who opens the file online is registered by default as a micro business (Esek Za'ir), unless they opt out in the registration application. On this track 30% of turnover is deducted instead of actual expenses, so tax is calculated on 70% of turnover, and you file a shortened annual return. If your business expenses are higher than 30% of turnover, you can ask to leave the track, so it is worth estimating your expenses when you open the file.
How Keep Helps You Through the Process
At Keep, we know that bureaucracy can be exhausting, especially when you are just starting out. We offer full support throughout the file opening process -- from filling out forms to receiving confirmation from the Tax Authority -- for a one-time fee of 99 NIS + VAT.
- Opening your file -- Our team guides you step by step and handles opening the file with the authorities
- Digital system -- Unlimited receipts and invoices, payment requests, and charging clients by credit card and bit, on every plan
- Expense upload -- Upload business expenses in a click (photo or file), in the recommended plan
- Reports and payments to the tax authorities -- In the recommended plan, with a personal accountant for professional guidance and representation before the tax authorities
- All your business data in one place -- A dashboard with income, expenses and profit for any date range you choose, on every plan
To open your file through us, you send us a few details and documents, and we handle the opening with the authorities.
After opening your file you can choose a plan: the basic plan costs 39 NIS a month + VAT and the recommended plan costs 105 NIS a month + VAT. These are Osek Patur prices; an Osek Murshe pays an extra 123 NIS a month including VAT (as of September 2026). The annual report is not included in the monthly price and is offered at a special price in the recommended plan. There is no commitment, and you can switch plans at any time at no cost.
Summary -- It Is Much Simpler Than You Thought
For an Osek Patur, online income tax registration has become a simple and convenient process, and an Osek Murshe opens the file through a representative or at the VAT office. There is no need to be intimidated by the bureaucratic steps -- we are here to guide you through opening your file. With Keep, you can focus on building and growing your business without worrying about unnecessary paperwork.
You need to open the file no later than the day your business starts operating, and a common mistake is to start working and taking payments before that. If you have already worked without a file, open it as soon as possible and report the income from the period before registration too; it is worth consulting an accountant about this. An Osek Murshe also cannot deduct VAT on invoices issued to them before registration.
Frequently Asked Questions About Opening an Income Tax File Online
Can an Osek Murshe open an income tax file online?
As a rule, no. The Israel Tax Authority's online service is for an Osek Patur. An Osek Murshe opens the file through a representative linked to the Tax Authority's computer system, such as an accountant, tax adviser or lawyer, or at the regional VAT office by appointment.
How long does it take to open an income tax file?
The Tax Authority does not commit to a fixed processing time. You can submit the online application at any time except during system maintenance; a Tax Authority office then handles it and sends updates by SMS and email. Clear documents and accurate details help avoid delays.
Do I need to register with National Insurance separately?
Not always. In the Osek Patur online application you can tick the option to open a National Insurance file too. If you already have a Tax Authority file and National Insurance has not been notified, you tell it that you have started working as self-employed on Form 6101. After registering you pay monthly National Insurance advances based on the income you declared.
What is the difference between an income tax file and a VAT file?
Both files are held by the same body, the Israel Tax Authority. The income tax file is used for the annual return and advances, and VAT registration determines whether your business is an Osek Patur or an Osek Murshe. An Osek Patur opens both at once with the online application; an Osek Murshe submits Form 821 for VAT and Form 5329 for income tax.
Does an Osek Patur have to pay income tax advances?
In most cases, no. A new Osek Patur who opens the file online is registered by default as a micro business (annual turnover up to 122,833 NIS, as of 2026), and most micro-business owners are exempt from advances and pay the year's tax once, with the shortened annual return. This exemption does not cover National Insurance: if National Insurance classifies you as self-employed, you pay monthly advances based on the income you declared.
