A new business client sends a list of documents they need before paying, and near the top is almost always a bookkeeping certificate, "ishur nihul sfarim". It is a Tax Authority document confirming that the business keeps its books the way the law requires and files its reports. It costs nothing, and for most businesses it already exists and only needs printing.
Any business's certificate can be seen in the Tax Authority's certificates system, by file number, without logging into a personal area.
What the certificate confirms
A bookkeeping certificate says two things: the business keeps its accounts as the bookkeeping rules require, and it files the reports it owes, such as the annual return and the periodic reports. It says nothing about the quality of the service or the size of the business.
In most cases it appears on the same page as the withholding tax rate set for the business. They are separate things: the bookkeeping part vouches for the books, and the rate decides how much is held back from each payment. Because both come from the same system on the same document, clients ask for a "bookkeeping and withholding certificate" in one breath.
Why public bodies cannot pay without it
The Public Bodies Transactions Law says a public body does not contract with a supplier that has no bookkeeping certificate. A government ministry, a local authority, a public hospital or a government company cannot sign an order without it, however much they want the service.
Private companies are not bound by that law, but many require the certificate as policy. A finance department that pays a supplier without a valid certificate has to withhold tax at the default rate, and the certificate is how it knows what to do.
Getting your certificate
For a business that files on time and has no open debt, the Tax Authority issues the certificate on its own, with no request. To send it to a client, open the certificates system, type the file number (the ID number for a sole trader, or the company number) and print or save it as a PDF.
A new business gets its certificate after opening a file with income tax, usually within a few days. If you opened a file and still see nothing in the system, ask the assessing officer or have your accountant check what is holding it up.
The certificate carries an expiry date. Put it in your calendar, because a client who checks on payment day will treat an expired certificate as no certificate at all.
Checking a supplier's certificate
When you are the one paying, the check happens in the same system. Type the dealer or company number from the supplier's invoice and look at three things: that there is a bookkeeping certificate, what withholding rate was set, and until when it is valid.
It takes under a minute and is open to anyone. A dated screenshot is the simplest proof you checked if the question comes up later. You can check the business number itself first, to rule out a typo on the invoice.
When the certificate is not issued
A certificate that is not being issued almost always points to an open issue with the Tax Authority. The three common causes:
A report that was not filed. A missing annual return, periodic VAT report or advance-payment report stops next year's automatic issue. Once it is filed, issuing resumes.
An open debt. Unsettled income tax or VAT debt blocks the certificate. A payment arrangement with the Tax Authority usually resolves it.
Disqualified books. When the Tax Authority disqualifies a business's books after an audit, the certificate is withdrawn until the matter is dealt with. What the books need to contain is covered in the bookkeeping guide for the self-employed.
An osek patur needs it too
An osek patur charges no VAT, which leads many to think the certificate does not apply to them. But the bookkeeping certificate belongs to income tax, where an osek patur is a full file holder. An osek patur working with a company or a public body will be asked for it exactly like an osek murshe.
The certificate and your invoices
A client receiving your invoice wants to know it comes from an orderly business. A valid bookkeeping certificate, an allocation number on a tax invoice above the threshold, and the right dealer number on the document are the three things a finance department checks before it sends money. In Slate your business details appear on every document by default, and the allocation number goes on the invoice before it is sent.
This is general information, not tax advice. For a specific case, talk to an accountant or tax adviser.
Common questions
What is a bookkeeping certificate?
A Tax Authority document confirming that a business keeps its books as required and files the reports it owes. It is issued by file number and usually appears on the same document as the withholding tax rate.
Who needs a bookkeeping certificate?
Any business that works with a public body, because the law bars a public body from contracting with a supplier that has none. Large companies also ask for it before a first payment, so in practice almost every business client will.
How do you get one?
For a business that files on time with no open debts the certificate is issued automatically, and all you do is print it from the Tax Authority's certificates system by file number. If it was not issued, ask the assessing officer or your accountant what is holding it up.
How do you check a supplier's certificate?
In the same Tax Authority certificates system, by the supplier's dealer or company number. The check is open to anyone and needs no login.
Does an osek patur need one?
Yes. The certificate belongs to income tax rather than VAT, so it applies to every open file, including an osek patur who charges no VAT.
Why is my certificate not being issued?
The usual reasons are an annual or periodic report that was not filed, an open debt to the Tax Authority, or books that were disqualified. Once the cause is dealt with, the certificate is issued again.