Issue an invoice without a file
The legal way to invoice a client without opening a dealer file · how it works.
Read moreForm 821 · Opening a VAT BusinessRegistering as an authorized or exempt dealer · full guide
Form 821 is the Israeli form for opening a VAT business · as an authorized dealer (Osek Murshe) or an exempt dealer (Osek Patur). Here is how to fill it in, when registration is mandatory, and what to do until your file is open. In the meantime · you can issue a legal tax invoice without opening a file, through NETO.
Invoice without a file
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What is Form 821 and how do you open a VAT business?
Form 821 is the Israeli form for opening a VAT business, used to register an authorized dealer (Osek Murshe) or an exempt dealer (Osek Patur). Any individual, partnership or company about to sell goods, assets or property · or to provide a service in the course of business activity · must register as a dealer at the regional VAT office nearest to the place of business, and must complete the registration on the same day the business activity begins.
Until the file is open and the paperwork is done · you can issue a legal tax invoice through NETO, which is registered as a manpower company. The client receives a proper tax invoice and you receive a payslip · so you can work like a freelancer even without Form 821.
What Form 821 is
Form 821 for opening a VAT business is used to open an authorized dealer or an exempt dealer. Any individual, partnership or company about to sell goods, assets or property · or to provide a service in the course of their business activity · must register as a dealer at the regional VAT office nearest to the place of business or activity.
Registration must be completed on the same day the business activity begins. The form is the gateway to the entire VAT file process · and is followed by opening a withholding tax file with the Income Tax authority and registration with the National Insurance Institute.
Can you work as a freelancer without opening a file?
It is a fair question, and the answer is no · but. You cannot legally issue invoices without opening a dealer file · but there is a solution that lets you work like a freelancer.
What does working like a freelancer mean? The client (the party ordering the service) receives a tax invoice · while you receive a payslip. Through the NETO system, registered as a manpower company, you can issue a one-time invoice or work this way over time · fully legal and properly documented.
Note: The NETO solution also suits anyone in the middle of opening a file · who wants to start getting paid right now, without waiting for the Form 821 bureaucracy to finish.
How to invoice before your file is open
A business owner who has not yet completed the full process and paperwork (Form 821 and so on) can use the NETO system. Through the NETO for freelancers system · the client receives an invoice and you receive a payslip.
Tutorial: how to issue an invoice without opening a file? · watch the tutorial video on YouTube.
VAT guide for the new dealer
The VAT guide for the new dealer from the Israel Tax Authority presents general, preliminary information only · for an individual, partnership or company about to carry out business activity such as selling goods, assets or property, or providing a service.
A business that wants to operate in Eilat or with entities in Eilat · should consult the Eilat Free Trade Zone guide, or contact the Eilat VAT office for guidance.
Filling in Form 821 to open a VAT file
The whole process starts with filling in Form 821. The form has two parts · the details of the dealer and the business, and the type of registration requested (authorized dealer or exempt dealer). You fill it in, sign, and submit it at the nearest regional VAT office.
It is worth reading the guide to opening an authorized or exempt dealer · especially for an employee who is also self-employed. In parallel · anyone who wants to start working right now can issue an invoice without opening a file through NETO.
The process of opening a VAT business
1Fill in Form 821
Enter the dealer and business details and choose the type of registration · authorized dealer or exempt dealer. Sign and prepare for submission.
2Register at the VAT office
Submit the form at the regional VAT office nearest to the place of business · on the same day the business activity begins. The withholding files open from there.
3Meanwhile · invoice with NETO
Until the file is open, you can start working and getting paid · the client receives a tax invoice and you receive a payslip through NETO.
Authorized dealer vs exempt dealer
Both types of registration are opened using the same Form 821 · the difference lies in how VAT is handled and reported:
| Topic | Exempt dealer (Osek Patur) | Authorized dealer (Osek Murshe) |
|---|---|---|
| Charging VAT to customers | Exempt · does not charge VAT | Charges VAT on the invoice |
| Periodic VAT reporting | No periodic return · annual declaration only | Reports and pays VAT each period |
| Offsetting input tax | Cannot offset | Offsets VAT on business expenses |
| Business turnover | Up to an annual ceiling set by law | No ceiling · suits higher turnover |
| Form used to open | Form 821 | Form 821 |
The exempt dealer turnover ceiling is updated from time to time · before deciding, check the current amount on the Israel Tax Authority website or consult an accountant.
Frequently asked questions
What is Form 821 and what is it used for?
Form 821 is the form for opening a VAT business · to register an authorized dealer or an exempt dealer. It is submitted at the regional VAT office nearest to the place of business. Any individual, partnership or company about to sell goods, assets or property · or to provide a service in the course of business · must register.
When must you register for VAT?
Registration must be completed on the same day the business activity begins · at the regional VAT office nearest to the place of business or activity.
Can you work as a freelancer without a file?
You cannot legally issue invoices without a dealer file · but through the NETO system, registered as a manpower company, the client receives a tax invoice and you receive a payslip. This lets you work like a freelancer even without Form 821. You can issue a one-time invoice or work this way over time.
How do you invoice before your file is open?
Anyone who has not yet completed the Form 821 bureaucracy can use the NETO for freelancers system · the client receives an invoice and you receive a payslip, with no open file required.
What is the difference between an authorized and an exempt dealer?
An exempt dealer does not charge VAT to customers and does not file periodic VAT returns · up to an annual turnover ceiling set by law. An authorized dealer charges VAT, files returns and offsets input tax · and suits a higher turnover. Both are opened using the same Form 821.
Have more questions · who do you contact?
You can browse the FAQ, reach out to NETO support and customer service, or simply get in touch by phone at 08-976-1874 · our support team is here for you.
Summary
- Form 821 = the form for opening a VAT business · as an authorized or exempt dealer.
- Register at the regional VAT office · on the same day the business activity begins.
- An exempt dealer does not charge VAT up to a ceiling · an authorized dealer charges, reports and offsets input tax.
- Until the file is open · you can issue a legal tax invoice without a file, through NETO.
File not open yet? Start working right now
Until Form 821 is done · issue a legal tax invoice through NETO. The client receives an invoice and you receive a payslip.
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