The Israeli government announced a new financial measure that seeks to create an environment that fosters innovation and the success of small businesses, essential to the country's economic fabric.
This is Osk Za'ir, a new classification that simplifies the tax process for small businesses, allowing them to save time and reduce costs. Starting in 2024, small businesses with annual revenues of up to NIS 120,000 will be able to apply for the new status, which will allow them to deduct 30% for operating expenses, and they will no longer have to record detailed costs such as pensions or donations or file full tax returns or asset declarations.
However, entrepreneurs with high operating costs or who rely on specific deductions should evaluate whether this new classification is the most suitable for them. In addition, anti-tax evasion rules set limits: no more than 50% of income can come from a single client, and certain businesses, among others.
To facilitate the transition, the Tax Authority has launched a digital portal that allows eligible entrepreneurs to register and report their income efficiently.