Bookkeeping and Compliance
Running an active business in Israel, whether it is local branch or a subsidiary, requires adequate bookkeeping payroll and accounting systems, process and tax filings.
The ITA (Israeli Tax Authorities) has some local specific compliance requirements that are not common in other countries, such as:
- Bookkeeping system. ITA has a list of allowed bookkeeping software. Using a global bookkeeping system with no approved Israeli instance may result a major compliance issue, and a hefty tax impact.
- Monthly compliance reports. Any local business has to file (up to) four monthly compliance reports that include CIT down payments, tax withholding, social security, and VAT.
- VAT digital file. VAT reporting requires a digital file with a fixed format, dictated by VAT authorities. Only localized systems can generate this reports.
- Withholding from payments. Any Israeli business paying to a local vendor is required to withhold a certain percentage (usually ZERO, but not always) from every payment, and remit such amount in the following monthly report.
- Payroll. Similar to other countries, payroll has significant localized attributes, and can be calculated only with local adjusted systems. There are also compliance reporting on an annual and twice-a-year basis.
Hence, global corporations that are used to managing all their sub-entities around the world from a central bookkeeping unit, and AP teams, find it almost impossible to do the same in Israel.
Our Global Outsourcing Team in BDO Israel can:
- Support your local operations with all your Bookkeeping, Accounting and Payroll needs.
- Help you file all the periodic and annual compliance reports to the various tax officers, and correspond with the corporate central accounting, AR and AP teams as needed.