More about the big decision – zair, murshe, or what?

February 23, 2010

Some one else posed this question and I am posting it here, with my answers interspersed. Hope it hopes him and you!

Dear Gidon:

I have been reading your blog about succeeding as an “Atzma’i” for advice about my situation. I am a 24 year old recent oleh from Boca Raton, FL now living in Jerusalem.

>>Welcome! my sister is from Boca, we should compare notes..

I am in the midst of my enlistment process for the IDF, having already hope to be drafted in the summer.

>>Behatzlacha rabba on that too!

In the meantime, I’ve been hired as an outside contracted translator for a consulting firm based in Tel Aviv, on a part-time basis. My employer says that her company can only pay me if I open an “Osek Za’ir” file, because I am not a company employee and they do not want me to be entitled for full employee benefits.

>>They are thinking inside the box that they know.  The know that they do not want to hire you, for the reason you mention and maybe others. They know that they have to work within the framework of the law, so they cannot pay you “under the table.” They realize that they will not be paying you so much that it would make it worth your while to open up a tik as osek mursheh, and they are familiar with the less known possibility of Osek Zair, which seems to fit your situation, so that is what they are  recommending/requiring of you.

Researching your site and speaking to other people, it seems she meant an “Osek Patur”.

>>Same thing

I intend to work at this position until my army draft, no more than 4 or 5 months. Moreover, the total salary I earn won’t amount to more than 20,000 shekels.

>>If this (or even as much as about 60K NIS) is all that you will make during calendar year 2010 in receiptable work (not as an employee, or as a soldier I would venture to guess – any position with a tlush maskoret) then they are right – you can be an osek zair, and probably should be.

I’ve spoken to some employment specialists from Nefesh B’Nefesh, and a few Jerusalem-based accountants about my status and which option of registering as an independent seeks me best. The consensus among them seems to be that I should open an Osek Patur of the “third category”- as an atzma’i- with a Koach Adam company.

>>I am not sure what you mean here. When you go to open as an Osek Patur (in the VAT office), you actually first open as an Atzmai in the Mas Hachnasa office. There, at Mas Hachnasa, they ask you what you want to do as your business, but I don’t remember categories, you just tell them Translation Services or Translating and Business related services or whatever, they don’t really care too much about small businesses that barely bring them tax income at all  .. I for SURE don’t understand this Koach Adam part..

(One account told me to look up a Jerusalem-based company called Oleh Sapir in the white pages, which I couldn’t find) According to them, I open a file with this company, and my employer sends my paychecks to this firm, who takes a small commission to handle my case.

>>Ahh. “Oleh Sapir” is probably Yeul Sachir, a company that I am quite familiar with, and owe my loyal readers a deeper post about.  I can see how someone might call this a Koach Adam company, but it works quite differently from standard koach adam companies, like Manpower.

With Manpower, they collect potential workers for positions that they specialize in, then companies who want to hire someone to do that job but want to save themselves some headaches (interviewing, training, benefits, etc etc) and frequently for a short term contract, go to Manpower and get someone.

With Yeul Sachir, the service professionals do the services they specialize in, but they also do the marketing of their services, and have a personal relationship with the companies/people they do business with. Yeul Sachir does the finance work, bills your client and collects (with help from you) and pays you with a tlush, as you are legally their employee. They take a cut of 7% up to 400 NIS a month for their services.
They maintain that the advantages of this option include: easy opening and closing my file as an Osek Patur,

>>Actually, establishing a repationship with Yeul Sachir obviates the need to open or close an Osek Patur file at all.

no taxation on American assets,

>>I am not sure of this one

and no hassle opening my own Osek Patur at varius bureaucratic agencies while I am being interviewed by the army agencies to secure my placement.

as above, no need to interface at all with Mas Hachnasa or VAT

I am still confused about how to proceed, as I am in the dark with the Israeli tax system and bureaucratic institutions. I would greatly appreciate any advice you can give me about how to go about this.

>>Notwithstanding the extensive descriton I gave above of Yeul Sachir, since it looks like you are only going to bill about 20K NIS this calendar year, and since I assume your client will be a business, which means they do not care whether they “pay” their service providers VAT or not (because the deduct it), Rodan Gordon (principal at Yeul Sachir) would probably encourage you to open a tik as an Osek Zair.

Try calling him at 02-6510666, tell him Gidon sent you.

Good luck!

PurIm Same’ah!

Opening a Tik Osek Patur at Maam

March 23, 2008

As is the case with many bureaucratic hurdles in Israel, doing this is less scary than you may have been led to think.

Why Osek Patur?

If you are just starting out your business, do not expect significant expenses, and do not expect more than around 5,000 NIS a month income (actually, 60,000 a year), then you may prefer to open as an Osek Patur. The benefit is simply that you are not required to pay VAT monthly. Ultimately, you will hopefully graduate to Osek Murshe status (as a friend of mine once said, he loves paying a lot of tax; that means he’s making a lot of money!) but meanwhile, one less office to interface is worth it imho.

What To Expect

About an hour’s wait in the office

No wifi in the waiting room

Fill out a form (I’ll try to get a copy of it and scan and post it here)

Non-standard form fields

<snip> I will post this and revisit it when I get a copy of the form. Unfortunately, I neither photocopied the form I submitted nor got a copy or processed report of it (as I probably expected, silly me!), so it’s a little hard for me to recreate it from memory.

My first official steps

February 25, 2008

After consulting with my friend Rodan Gordon and others, and spending frustrating hours on relevant websites, I made plans to open up my file in Maam and Mas Hachnasa and Bituach Leumi.

I was all set to go the the Maam ofices at Kanfei Nesharim street 66 and then to the Mas Hachnasa office at Center 1, in spite of there being a Mas Hachnasa office in Kanfei Nesharim 66, because I was led to believe that as a Maale Adumim resident, the Kanfei Nesharim Tax clerks would not give me the time of day, and I would only get service at Center 1. However, I was happily informed that in spite of the [hand written] sign in the first Mas Hachnassa office I was directed to asserting that Maale Adumim residents are persona non grata, that is only for gvia or tium mas or some other officialness that I will have to deal with in the future. Today, assured me the guard at Kanfei (who doubles as Modiin – information), I could OPEN a tik atzmaim in Mas Hachnassa here, floor three or minus one.

Then I sat down to write this entry (free electrical outlet in the entry hall at Kanfei; false Wifi though) and had a delicious Pinati choumous and ful in a pita (12 NIS to go, in spite of the sign that says 13 NIS. No, my mistake, the humus is 12, its the shakshuka that’s 13. The humus was great, but next time Shakshuka:-)