According to experienced auditor Shmuel Brodetsky, the beginning of the year is the best time to start your own business. More precisely, the best time to register a business with the tax authorities. In this article, the famous Israeli Rohe Heshbon will share stories from his practice.
If you register your business in January or February, then you will have a whole year to:
- development of business processes,
- to incur and take into account all the expenses that your business involves,
- to understand how much you can really earn,
- if necessary, then change the status of a private entrepreneur
- in practice, identify a majority of other financial nuances of your business.
And having survived all this, taught by experience, practice and a good accountant, at the end of the year you will pay exactly the amount of taxes that is due to you.
For example, if you start a business, but are not sure that you will exceed the limit of 100 thousand shekels in the first year, then you can start in the status of оsek patur (which does not pay Ma’am), and when you reach the limit, re-register in оsek murshe. For a starting entrepreneur, this is a very good solution, which allows you to save money on startup. Just do not try to implement such a schedule yourself. The sequence and timeliness of all actions is very important here. Ensure the support of an experienced professional.
Overpayment of taxes in the first years after starting a business is a very common mistake of beginning entrepreneurs. In thematic forums on the Internet, there are stories of entrepreneurs in the style of this: “Mas Akhnasa has billed me 10 thousand shekels of taxes payable. But I haven’t earned so much! I am full of it. I am closing. Business in Israel cannot be done. ” Some clients came to me in this mood: “I’ll try to make the last leap – I will give my accounting to outsourcing. But something drives away. ” At the end of the year, after paying taxes, summing up and planning the next year, few of them recalled that they had been actually going to close.
Another situation. At a party with friends, he met a man who said that he was trying to run a business, but he had only few orders, and his income was meager. He worked “in black”, and was afraid that taxes would absorb all his meager income. He couldn’t afford an accountant as it was very expensive. A few days later we met in my office, analyzed his business and growth prospects, in case he would start to advertise. I made a forecast on the amount of taxes, showed what kind of nikudoy zikuy should be supposed to him, what benefits he did not use as a new repatriate. Do you know what he said? “How much I have already paid while I was working in the black!”
In Israel, you can do a successful business, legally pay minimum taxes or not pay them at all and sleep peacefully. Israeli tax authorities are very vigilantly monitoring what is due to them. And for cheating and concealment of income they punish harshly and mercilessly. Any transactions that are not of a single instance should be executed by the tax authorities as a private entrepreneur or other form of business. You sell some goods, provide services and receive payment on a regular basis – you must report on these incomes and pay taxes on them. Because Israel has created excellent conditions for doing business, you only need to know the laws and use them wisely.
