Opening a Licensed Dealer: How to Register and What

Opening a licensed dealer includes registration for VAT, opening a file for Income Tax, and arranging your status with National Insurance. To start, prepare identification documents, bank account details, and proof of business activity. You can handle the registration yourself or use the services of start business, where you fill out an online questionnaire and upload the required documents.

This guide is suitable for those planning to open a business as individuals and have already checked that the appropriate registration for them is a licensed dealer. This could be due to the type of profession, expected turnover, or a choice verified with an accountant. Here, we will focus on preparations and submission, so you know what to do before starting operations.

What Documents Are Needed to Open a Licensed Dealer?

For VAT registration, fill out and sign Form 821, a request to open a licensed dealer file. According to the Tax Authority, you need to attach identification documents, proof of bank account, and documents related to the business location and activity. Requirements may vary based on the type of occupation and circumstances, so it's advisable to check the list before submission.

• Identity card.

• Proof of bank account: confirmation of account details from the bank or a copy of a canceled check from the business account.

• Document regarding the business location: rental or purchase agreement, as applicable.

• Professional certificate or business license: when relevant to the activity.

• Proof of business establishment: documents supporting the planned activity, according to VAT requirements.

Also prepare a clear description of the occupation, the start date of the activity, and an estimated turnover. Turnover is the total income from the business before deducting expenses. If there are multiple areas of activity, describe them accurately. The form and submission requirements can be found on the VAT registration page of the Tax Authority. Israel Tax Authority

How to Prove Activity When the Business Is Still Being Established?

A new business may not always be able to present income or customers who have already paid. For the registration request, you can present documents that indicate the establishment and planned activity. The Tax Authority mentions examples such as agreements and documents related to purchases related to the business. There is no single document that fits all activities, and you may need to supplement information based on the industry and nature of the business.

For example, a professional who purchased equipment can prepare the purchase documents, and a service provider who has already signed an agreement with a client can prepare the agreement for review. These are examples of possible proofs, and not a guarantee that they will suffice in every case. If you work from home, explain where the activity takes place and check what documents are required in your circumstances. There is no need to rent an office just to present a business address.

Registration for VAT, Income Tax, and National Insurance

According to the Tax Authority's guidelines, when independently opening a licensed dealer file for VAT, submit Form 821 and the documents at the appropriate regional office, with an appointment in advance. You can also open the file through a representative, such as an accountant or tax advisor. Registration is required no later than the day the business activity begins, so it's advisable to prepare the request in advance. Israel Tax Authority

Additionally, open a file for Income Tax and arrange the registration with National Insurance. For Income Tax, you can submit a request through the public inquiries system along with Form 5329 and the required documents, according to the guidelines. When using the combined registration route, you can also submit the request to National Insurance. If the registration there is not completed, submit a multi-year report. At National Insurance, you also provide an estimate of income and working hours, which affects the determination of status and insurance fees. Israel Tax Authority

Completing Registration and Preparing for Ongoing Work

Confirmation of submitting a request is not necessarily confirmation that the file has been opened. Follow up on notifications, complete requested documents, and check that you have received registration confirmations from all relevant bodies. After opening the files, ensure you know how to issue documents to clients, keep expenses, and submit the reports required of you. It's advisable to arrange this before the first payment, along with whoever will handle the accounting management.

At start business (opens in a new tab), you can start through the online registration questionnaire, fill in the activity details, and upload documents. We handle the registration process according to the case. Opening the files is separate from accounting management services and annual reports. If you also need ongoing support, you can check the services of our partner EA&CO and find out what is included.

Frequently Asked Questions

Can I Open a Licensed Dealer Online?

With a service like start business, you can start the process online, fill out a questionnaire, and upload documents. It's important to distinguish between this service and independent submission: according to the Tax Authority's service page, opening a licensed dealer file for VAT is done by visiting the regional office or through a representative. Do not assume that the self-opening route for an exempt dealer is also suitable for a licensed dealer. Israel Tax Authority

How Much Does It Cost to Open a Licensed Dealer?

The government registration service for VAT is provided at no cost. If you use a commercial service for handling the request, you will pay for the service according to its terms. Before ordering, check which files are included in the service, if there are additional payments, and what is required from you. It's advisable to separate the opening price from the cost of accounting support after the business starts operating. Israel Tax Authority

How Long Does It Take to Open a Licensed Dealer?

The processing time depends on the submission route, the availability of appointments when a visit to the office is required, and the review of documents. A request lacking information may require supplements. Therefore, it's advisable to prepare clear proofs in advance and not to plan based on guaranteed processing times. When using a registration service, inquire separately when the request will be submitted and when approval is expected from each body.

Do I Need an Accountant to Open the Files?

You do not need to use an accountant to open a sole proprietorship. You can complete the registration independently, according to the guidelines of each body. However, the responsibility for completing the registration and the accuracy of the details remains yours. If there is doubt regarding classification, documents, or reporting obligations, a professional check before submission can help you start in an orderly manner.

Is a Licensed Dealer Approval Enough to Start Working?

Licensed dealer approval indicates registration for VAT, but you need to ensure that registrations for Income Tax and National Insurance are also completed. Additionally, check other requirements related to the activity, such as a business license or professional license when required. Before starting work, ensure you also have a suitable way to issue documents to clients and keep business records.

To proceed, prepare your identification and bank documents, a description of the activity, and any proofs you already have. We would be happy to assist you and guide you through the process of opening a licensed dealer. You focus on the business, and we will focus on the bureaucracy.