Show TOC

Function documentationManaging Vendor Withholding Tax Reports: Israel Locate this document in the navigation structure


The Israel Tax Authority can change the percentage, or rate, of withholding tax to be deducted, or withheld, at any time during the fiscal year. Companies are required to check every 1 to 3 months with the Israel Tax Authority the correct percentage to be deducted before paying vendors.

SAP Business One enables you to generate 2 types of reports with vendors' details to submit to the Israel Tax Authority:

  • Maarechet 1000 (up to 1000 vendors in the company database)

  • Mivzak (more than 1000 vendors in the company database)

You only need to submit one type of report.

SAP Business One also enables you to import electronic files from the Israel Tax Authority with the updated percentage, validation date, withholding tax type, and so on). Importing the file into SAP Business One triggers an update of field values in the company database to be used during the creation of documents.

In SAP Business One, two methods for calculating withholding tax for vendors are supported:

  • Nonhierarchical deduction at source

  • Hierarchical deduction at source

Note Note

End of the note.

It is recommended to check that the federal tax ID (especially for the Mivzak report) is correctly entered for each vendor record submitted to the Israel Tax Authority. This number is used as a matching key for records in SAP Business One.


Vendors in the company database are defined correctly for withholding tax.