Operating as a Licensed Dealer (Osek Murshe) requires ongoing compliance with VAT reporting, income tax advances (Mikdamot), and Bituach Leumi filing.

Top Licensed Dealer Questions Answered:

1. What is a Licensed Dealer (Osek Murshe)?

An Osek Murshe is a business registered with the VAT Authority authorized to issue Tax Invoices (*Hesbonit Mas*), collect VAT from clients on sales, and offset input VAT paid on business purchases.

2. When Must I Open an Osek Murshe?

You must register as an Osek Murshe if your annual business turnover exceeds the 120,000 ILS threshold (or 122,000 ILS ceiling projection), or if your profession is listed under restricted liberal professions required to be Osek Murshe from day one.

3. What is the Main Difference Between Osek Murshe and Osek Patur?

Osek Patur is exempt from collecting VAT on revenue and cannot offset input VAT on expenses. Osek Murshe collects 17% (or 18%) VAT on all client invoices and reclaims VAT paid to suppliers.

4. Does an Osek Murshe Pay More Income Tax Than an Osek Patur?

No! Income Tax (*Mas Hachnasa*) rates are calculated on net profit (revenue minus recognized expenses) regardless of whether your business is Osek Patur or Osek Murshe.

5. Should I Register as Osek Murshe Even Below the Turnover Threshold?

Yes, if your clients are primarily corporate businesses (who prefer receiving tax invoices to offset VAT) or if your initial business equipment investments involve high input VAT that you wish to claim back.

6. How Frequently Must I Report to Tax Authorities?

VAT reports are submitted monthly or bi-monthly (by the 19th of each period). Income Tax advance payments (*Mikdamot*) are paid bi-monthly, and an annual Form 1301 return is filed after year-end.

7. Is Hiring a CPA Mandatory for Osek Murshe?

While not legally mandatory, managing double-entry bookkeeping, monthly VAT returns, advance tax calculations, and annual filing without a CPA exposes business owners to costly reporting errors and missed expense write-offs.

Bernstein & Co. handles full monthly accounting and tax representation for licensed dealers across Israel.