Many individual entrepreneurs are afraid to switch to osek murshe because they believe that they will pay very high taxes. As a rule, this is very far from the truth, and sometimes being an osek murshe is more profitable than being an osek patur. Let's look at four cases.
1. When the majority of clients are business clients: Oskim Murshim and companies.
These business clients will still receive bondage without VAT or hashbonit with VAT,
since they can write off VAT. That is, you receive payment with VAT, you must pay this VAT in VAT, but at the same time you can write off VAT on purchases. That is, you have “profit” from moving to Osek Mursha. This “profit” is reduced due to the fact that accounting services are usually more expensive for Osek Murshe than for Osek Patur. But in any case, such businesses either gain or lose very little when switching to osek murshe
2. The business is engaged in exports. Exports are exempt from VAT on sales, but can write off VAT on purchases. In this case, as a rule, you should initially register as osek murshe
3. A business buys inventory or equipment for significant sums and wants to receive a VAT refund. In this case, as a rule, you should initially register as osek murshe
4. But finally, there is a case where most clients are private, that is, they cannot write off VAT. In this case, it really is not beneficial to be a misfired mursha, but again there are several “mitigating” circumstances
- it’s better to earn a lot and be a misfire than to earn a little and be a misfire
- the tax does not increase by 17%, but less since you can write off VAT on the purchase
- in any case, an amount up to 120,000 shekels actually remains exempt from VAT for 2024, that is, VAT is paid on each subsequent shekel after the turnover exceeds 120,000 shekels
- quite often clients are sympathetic to the explanation that the business must increase the price by 17% since it switched to osek murshe.
There are cases when switching to Osek Murshe is not profitable and switching to Osek Murshe can be avoided. For example, you approached the Osek Patur border in mid-December, then you can take a vacation for a couple of weeks without crossing the border and remain Osek Patur
Comments