What Is "Osek Zeir," and Does It Apply to You?
A 2024 reform introduced the category of osek zeir ("micro business"), giving real relief to self-employed people with a small turnover. If you're self-employed with annual revenue under NIS 120,000, you may qualify.
What counts as a micro business
An osek zeir is a self-employed person whose annual turnover doesn't exceed NIS 120,000. This refers to total revenue from transactions during the tax year, not net profit. A micro business isn't necessarily an exempt dealer (osek patur); a licensed dealer (osek murshe) can qualify too.
The benefits
Automatic expense deduction: when filing your annual return, a micro business can automatically deduct 30% of revenue as a recognized expense, with no receipts or invoices required.
Exemption from advance payments: a micro business generally isn't required to pay advance installments during the year and pays at year-end instead. In some cases the assessing officer may still require advances.
Who doesn't qualify
Certain conditions disqualify a business, even with revenue under NIS 120,000:
- Employing workers
- Not keeping acceptable bookkeeping records
- Income that isn't from personal effort
- Income from a current or former employer
- Income from a transparent entity
- More than 25% of income from a relative or former employer over the last three years
- Controlling interest in a closely held company
How to register
Exempt dealers are registered as a micro business automatically, though you can opt out. Licensed dealers can declare that they meet the conditions as part of the annual return; detailed instructions are published closer to the filing deadline.
Micro-business status exists to ease the burden on self-employed people with modest income. If you think you qualify, it's worth checking and claiming the benefit.