The end of the year is a strategic period for self-employed individuals wishing to reduce their tax liability. Smart preparation helps avoid unnecessary tax payments and ensures that all available benefits are fully utilized.
ASSULINE & CO, experts in self-employed taxation, presents the 7 essential actions to review before closing the 2025 tax year.
1. MAXIMIZE THE BENEFIT OF THE KEREN HISHTALMUT
The Keren Hishtalmut remains one of the most effective tools for reducing your tax liability.
- To obtain the maximum tax credit, an annual contribution of 13,203 NIS is sufficient;
- To fully benefits from the contribution, it is recommended to deposit up to the annual cap of 20,566 NIS.
Investing in a Keren Hishtalmut means building a flexible savings plan — and enjoying a valuable tax advantage.
2. INCREASE YOUR RETIREMENT CONTRIBUTIONS (PENSION)
Good tax preparation also means planning for your future.
Recommended contributions for 2025 are:
- The advised minimum is 13,582 NIS per year;
- The Maximum deduction relative to your taxable income is up to 38,409 NIS per year to
Beyond reducing your income tax, you secure your retirement – a dual benefit.
3. DEDUCT DONATIONS TO APPROVED ORGANIZATIONS
Donations provide a particularly attractive tax advantage.
You may donate up to 30% of your taxable income and receive a 35% tax credit on the donation amount.
It is both an act of solidarity and an efficient way to optimize your taxation.
4. REGULARIZE YOUR PAYMENTS TO NATIONAL INSURANCE (BITUAH LEUMI)
A significant portion of the contributions paid to Bituah Leumi is deductible: 52% of the amount paid (excluding health insurance) may be deducted.
If you have an outstanding balance or an expected increase in income, it is strongly recommended to settle these amounts before the year ends.
5. CHECK YOUR INCOME TAX ADVANCE PAYMENTS
Your mikdamot (advance tax payments) must reflect your actual income.
You can make additional payments until the end of January 2026, without penalties, and these will still be considered as paid “on time”,
a good way to avoid surprises during the final assessment.
6. COMPANY DIRECTORS: BE CAREFUL WITH PERSONAL WITHDRAWALS
If you have withdrawn funds from your company, you may need to reimburse them or reclassify them as dividends.
A thorough review and proper planning at the end of the year help avoid costly tax payments on these withdrawals when submitting financial statements.
7. NEW IN 2025: REFORM ON UNDISTRIBUTED PROFITS
As of 2025, a major reform affects companies: new rules concerning accumulated profits may lead to additional personal taxation or even mandatory dividend distributions.
It is crucial to anticipate this reform to avoid unexpected tax burdens.
PLAN AHEAD, SAVE MORE
Proper year-end planning can turn tax obligations into optimization opportunities.
ASSULINE & CO’s team supports each self-employed professional and business owner to secure their decisions, reduce their taxation, and comply with current regulations.
Would you like a personalized review of your situation?
Contact us and prepare for 2026 with complete peace of mind.