A CPA for builders and solo founders

There is no exemption threshold for reporting business income, and modest income from Paddle, from Gumroad or from an app store is income in every respect. But in proportion: at those volumes it is usually a simple framework with minimal bureaucracy, and sometimes the tax in practice comes out at zero after expenses and credit points. What matters is that the framework is right early on. Regularizing in real time is far easier than regularizing retroactively, especially if the product grows.

An export of services to a foreign resident client is subject to VAT at a zero rate under Section 30(a)(5) of the Value Added Tax Law, subject to the conditions and the caveats in Regulation 12a. The practical meaning is large: you do not add VAT to the price for the client, but as a VAT-registered dealer (osek murshe) you still offset input VAT on your Israeli expenses - servers, a computer, professional support and an office. That is exactly why osek murshe status is usually preferable to osek patur for someone selling abroad, even at low turnover.

The books are kept in shekels, so every item of income in foreign currency is recorded at the representative rate at the relevant date, not at the rate at which you eventually converted. The difference between the two does not vanish: it is treated separately as an exchange difference. The common mistake is waiting for the transfer to the Israeli account and recording the amount that arrived, which shifts income between periods and distorts the picture. Money sitting in Wise or Payoneer is your money in every respect, even before it has been transferred.

In most cases no. An Israeli resident is liable for tax in Israel on worldwide income, so an American entity does not save tax merely by existing: it adds a reporting layer, ongoing costs and sometimes double handling. An American LLC is also a transparent entity in the US and opaque under Israeli law, which creates a mismatch that can harm the foreign tax credit. There are situations where an American structure is right - raising from an American fund, a platform requirement or a particular founder structure - and then the question is C-Corp versus LLC, and it is set up out of a decision rather than out of forum advice.

Stripe does not support businesses registered in Israel, and that is a real friction point for every Israeli builder. The three practical routes: a Merchant of Record such as Paddle or Lemon Squeezy, which sell to the end client while you issue a single invoice to a foreign corporation, which also simplifies the VAT question; Israeli processors such as Cardcom, Tranzila or PayPlus; or PayPal. Each route has a different fee structure and a different accounting meaning, and the decision between an MoR and direct processing also affects how the income looks in the books.

When the profit left in the business is significantly higher than your private consumption, so that two-tier taxation - corporate tax followed by tax on the dividend when it is drawn - creates a tax deferral that justifies the additional operating costs. Further triggers: a partner or investor coming in, a large client requiring a contract with a company, and an expected exit. It is also important to check the "wallet company" exposure in Section 62A of the Ordinance where all the income comes from a single source. This is a decision to make with numbers, not on a feeling.

Absolutely. That is exactly the audience the knowledge hub was built for. We are used to explaining things from the beginning, without assuming you know what a tax advance is or the difference between VAT and income tax, and without turning it into a lecture. The only question that matters is whether the product is starting to bring in money.

Yes. Most of our clients in this field are not in the area at all. The service is digital in nature: documents, signatures, filings and meetings all run online, and day to day communication is on WhatsApp. Anyone who wants to meet face to face is always welcome.