Osek Patur vs Osek Murshe - The Full Differences
Osek patur (“exempt dealer”) and osek murshe (“licensed dealer”) are the two possible statuses a self-employed person can hold with the Israel Tax Authority. Which one you have determines what kind of documents you’re allowed to issue, whether you’re required to charge VAT, and whether you can deduct input VAT on expenses. The choice isn’t always yours to make.
Osek Patur
An osek patur is exempt from charging VAT to customers and from remitting VAT to the Tax Authority, as long as annual turnover stays under a threshold set by law and updated every year. Instead of a tax invoice, an osek patur issues a transaction invoice and a receipt as two separate documents (or a single combined tax-invoice-receipt, if the business is VAT-exempt but still needs to document a payment). In exchange for the VAT exemption, an osek patur also cannot deduct input VAT on business expenses.
Some professions are barred from operating as an osek patur at all (certain licensed professionals, for instance), regardless of turnover. It’s worth checking this with an accountant before opening your file.
Osek Murshe
An osek murshe must charge VAT from customers and remit it to the Tax Authority every month or every two months, through a periodic VAT report. In return, an osek murshe can deduct input VAT on business expenses, meaning they get back the VAT they paid on equipment, services, and other business-related costs.
The practical difference in issuing documents
| Osek patur | Osek murshe | |
|---|---|---|
| Document issued to customer | Transaction invoice + receipt | Tax invoice (+ receipt if paid) |
| Charges VAT | No | Yes |
| Deducts input VAT | No | Yes |
| Periodic VAT report | No | Yes |
| Israel Tax Authority allocation number | Not applicable | Required above a certain threshold |
When switching to osek murshe becomes mandatory
Moving from osek patur to osek murshe is mandatory, not optional, the moment annual turnover crosses the threshold set by law for that year. Breaking this rule exposes you to fines. The full process of making the switch is covered in a separate guide.
How this shows up in Slate
Slate reads the business status set in your business settings and automatically adjusts which document types are available to issue and how VAT gets calculated, so it’s not possible to accidentally issue a tax invoice as an osek patur, or forget to charge VAT as an osek murshe.