How much does it cost to open an exempt dealer and what is

Opening an exempt dealer through the online service of the Israel Tax Authority is free of charge. When using a registration service, you pay for the processing of the application and the opening process, according to the service terms. Alongside the initial price, it’s important to understand what expenses may arise later and what is included in the offer you received before starting the process.

If you are about to receive your first job or start a small activity from home, it’s natural to want to know how much money you need to spend before the business starts earning. To calculate the cost correctly, separate it into three components: opening the files, managing the business, and tax and National Insurance payments.

Can you open an exempt dealer for free?

Yes. The online government service allows you to submit an application to open files for VAT and Income Tax at no charge for the submission. You fill in the details, attach documents, and track the processing. During the application, data is also provided to assess the need to open a file with National Insurance, and in appropriate cases, the information is forwarded to them.

Self-opening requires you to check that the activity is suitable for an exempt dealer, prepare the documents, and respond to completion requirements. Generally, you prepare an ID and a bank account management confirmation, along with additional documents as needed. If you know what is required and have time to handle the application, this is an option. If you prefer assistance, you can choose a paid registration service.

What do you pay for when using a business opening service?

The payment is for the service you receive, not a government fee for opening an exempt dealer. The scope of the service varies between offers: some services focus on submitting the application, while others include handling additional stages. Therefore, price comparison should start with the question of what exactly you will receive, not just the amount shown at the top of the page.

At start business (opens in a new tab), you can start with an online questionnaire, provide your activity details, and upload documents for the business registration process. Before ordering a service, make sure you understand its scope and who to contact if an additional document is required. It’s also important to distinguish between handling the opening of files and ongoing services you may need afterward.

What should you check in the price offered to you?

A clear offer should allow you to understand how much you will pay, which actions are included, and whether it is a one-time payment or part of an ongoing plan. Also, check if the displayed price is the final amount to be paid and if there are conditions for receiving it. A low opening price does not necessarily indicate a problem, but you should know what it includes.

Before ordering, check:

• Does the service include VAT, Income Tax, and registration with National Insurance as needed?

• Is there a response to completion requirements included in the opening request?

• Does the price include VAT, as applicable to the service?

• Is there a commitment to monthly service or additional payment?

• Are bookkeeping, annual reports, or professional advice included or priced separately?

For example, an offer for opening files only and an offer that also includes accounting support are two different proposals. To compare them, request a breakdown of the opening cost and the ongoing cost separately. This way, you will know what you are paying now and what to expect later, without discovering afterward that you misunderstood the service.

Expenses after opening the exempt dealer

After registration, you need to arrange for issuing receipts, keeping documents, and tracking income and expenses. Depending on your work method, there may be expenses for a document system, assistance with bookkeeping, and preparing reports. If you want ongoing support, you can separately check the services of the partner EA&CO. Do not assume that these services are included in the registration price of start business.

Additionally, there may be payments for Income Tax and National Insurance, depending on income and personal data. These are not opening fees. For example, a designer starting to work from home may pay for software and professional support, and separately be required to make payments based on their income. To plan your budget, it’s advisable to check what it will cost to operate the business in the first few months.

Frequently Asked Questions

Do you have to pay an accountant to open an exempt dealer?

You do not have to hire an accountant to submit the application. You can use the online service of the Israel Tax Authority and handle the registration independently. However, if you are unsure about the classification of the business, estimating income, or obligations that will apply to you, it’s advisable to get a professional review. The payment for such a review is separate from the option to submit the opening request for free.

Does the price of opening an exempt dealer include an annual report?

Only if it is explicitly stated in the service terms. Opening files and handling reports after the opening are different services. Before ordering, check if the preparation of an annual report is included, which tax year the service refers to, and which additional actions are priced separately. Do not settle for vague wording like "full handling" without understanding what it actually includes.

Do you need to pay a fixed monthly fee just for the registration?

You should not assume that just because you opened a file, you have to purchase a monthly subscription from a service provider. A monthly payment may be for software, bookkeeping, or support you chose. Separately, there may be advances and payments to authorities depending on your situation. When you receive a monthly offer, ask what service is provided and how it differs from the business's tax payments.

Is an exempt dealer also exempt from Income Tax and National Insurance?

No. The term "exempt dealer" refers to a classification for VAT and does not automatically grant exemption from Income Tax or National Insurance. The amount of payments depends on personal data, income, and the rules that apply to you. Therefore, even someone whose registration was done at no cost should check what payments and reports are expected after starting the activity and prepare for them in advance.

Should you choose the cheapest service?

It’s advisable to choose a service that fits your needs and presents a clear price and scope of treatment. If you only need help with registration, there’s no reason to assume you need a comprehensive service package. On the other hand, if there’s a professional question that hasn’t been resolved, a low submission price does not replace a proper review. Compare the same service content before making a decision.

Before opening the business, define what assistance you want and check what is included in the price. If you want us to assist you with registration, you can start with a questionnaire from start business. You focus on the business, and we will focus on the bureaucracy.