Casual TransactionWork legally in Israel · without opening a tax file

Q: What is a casual transaction?

A casual transaction (iska akrai) is a one-off, occasional income from a sale, a service or work that is not part of your ongoing business activity. Under Israeli tax law it is taxable and reportable, and the default is 30% withholding tax at source unless a reduced-withholding approval has been obtained.

Q: Do I need to open a business tax file for a casual transaction?

No, and that is the advantage. There is no need to register as a licensed dealer or open a file with the Tax Authority. Through NETO you can issue an invoice and receive a proper payslip without opening a file.

Q: How much tax do I pay on a casual transaction?

The default is 30% withholding tax at source, deducted by the payer, unless a reduced-withholding approval from the assessing officer is in place. The income must also be reported in the annual return. Through NETO the withholding is applied at the correct rate and reporting is done in full.

Need to issue an invoice in Israel but you have no registered business? A casual transaction lets you work legally on a one-off job · and NETO handles it all: the invoice, the payslip and full reporting to the authorities.

Start issuing invoices

What is a casual transaction?

A casual transaction (iska akrai) is a one-off, occasional income from a sale, a service or work that is not part of your ongoing business activity. Under Israeli tax law, in line with the Income Tax Ordinance, it is taxable and reportable · and the default is 30% withholding tax at source, unless a reduced-withholding approval has been obtained.

NETO lets you manage such transactions legally · including issuing an invoice without opening a file and receiving a proper payslip, with all withholding and reporting handled automatically.

On this page

When a transaction is casual
Common situations
Casual vs regular business income
The risks of a casual transaction
Tax on a casual transaction in 2026
How to work legally without a file
Frequently asked questions
Summary

When is a transaction casual?

A casual transaction is a central concept in tax law. A transaction is considered casual when the following conditions apply:

Outside regular activity

It is not part of a regular, ongoing business activity that you run.

A profit element

It carries an economic intent and a profit element · and is therefore taxable.

A sale, service or action

It is a sale of an asset, provision of a service or an identifiable economic action.

One-off or occasional

The transaction is one-off in nature · not recurring and not regular.

Common situations for a casual transaction

A one-off project · consulting, a lecture, design or development for a company.
Selling a private asset · equipment, a vehicle or property outside a business.
Student work · events, performances or single projects.
Occasional freelancers · one-off freelance work before opening a file.

Casual transaction vs regular business income

To understand the key differences, here is a comparison of three ways to manage income:

Criterion	Casual transaction	Regular business income	Through NETO ⭐
Frequency	One-off	Ongoing	Either way
Reporting duty	Yes · annual return	Yes · ongoing	NETO handles it
Opening a business file	Not required	Required	Not needed
Tax withholding	30% at source	By brackets	Automatic by NETO
Payslip	Not received	Depends on employer	Yes · a proper payslip

Casual transaction · the risks of one-off work without proper legal management

The risks of a casual transaction

A casual transaction sounds simple, but it carries risks worth knowing in advance. The default is 30% withholding tax at source, and it can be hard to obtain a reduction from the Israel Tax Authority.

On top of that there are no social rights, no national insurance paid by an employer and no proper payslip. For more, see the National Insurance Institute website.

30% tax withholding · the default without an approval from the assessing officer.
No social protection · no pension and no national insurance.
Reporting problems · fines and financial penalties from the Tax Authority.
Exposure for the payer · legal liability for tax that was not withheld.

Tax on a casual transaction · what to know in 2026

In Israel, income from a casual transaction is subject to income tax according to your personal tax brackets, and must be recorded in the annual return to the Tax Authority.

The main challenge: whoever pays for a casual transaction must withhold tax at source · usually 30%, unless a reduced-withholding approval is in place.

The solution: through NETO every casual transaction is managed automatically · the withholding is applied at the correct rate and reporting is done in full.

Note: working without reporting is a violation of the Income Tax Ordinance · and it exposes you to fines, financial penalties and audits. A properly managed casual transaction removes that risk.

How to work legally without opening a file?

One of the most common questions among occasional freelancers is: "Can I issue an invoice without opening a file?" The answer is yes · through a system like NETO, which acts as an Employer of Record in Israel. Instead of opening a business file, NETO employs you as an employee and manages the entire process: a proper payslip, an invoice issued in your name and automatic reporting to the authorities.

1Sign up

Create a NETO account online in minutes · with no bureaucracy.

2Report the work

Enter the client, the project and the agreed amount.

3Issue the invoice

NETO issues a proper tax invoice to the client, in your name.

4Payslip

All deductions · tax, national insurance and health tax · are handled automatically.

5Get paid

The money is transferred directly to your account, with a proper payslip.

Frequently asked questions · casual transaction

Is a casual transaction legal?

Yes. A casual transaction is a fully legal concept under Israeli tax law · a one-off or occasional income that must be reported and taxed. NETO manages the process automatically.

Do I need to open a business file?

No · and that is the advantage. There is no need to register as a licensed dealer or open a file with the Tax Authority. Through NETO you can issue an invoice and receive a proper payslip without opening a file.

How do I get paid for a casual transaction?

The process is simple: you report the work, NETO issues an invoice to the client, deducts the tax and pays you with a proper payslip. Everything is digital, within minutes.

What are the risks of working without reporting?

Working without reporting is a violation of the Income Tax Ordinance · and the risks include fines, financial penalties and exposure to an audit by the Tax Authority. Using NETO helps ensure correct, full reporting.

Casual transaction vs working as a freelancer?

A freelancer (dealer) runs a registered business with ongoing invoices and reporting · a casual transaction fits occasional deals without a business. NETO bridges the gap · you work like a freelancer without the burden.

How much tax do I pay on a casual transaction?

The default is 30% withholding at source, unless a reduced-withholding approval from the assessing officer is in place. The income must also be reported in the annual return. Through NETO the withholding is applied at the correct rate and reporting is done in full.

Summary

A casual transaction = a one-off, occasional income · taxable and reportable under the Income Tax Ordinance.
The default · 30% withholding at source, with no social rights and no payslip.
Through NETO · an invoice without opening a file, a proper payslip and automatic withholding at the correct rate.
All under manpower contractor license 1565 and Ministry of Labor oversight · NETO has operated since 2016.