What taxes does a self-employed person pay in Israel?

Three separate obligations apply. Income tax on business profit, calculated after recognised expenses. National Insurance and health contributions, paid on the same profit but under their own rules and ceilings. And VAT, if registered as an Osek Murshe — collected from clients and remitted, with input VAT offset against it.

Is National Insurance deductible against income tax?

A portion of it is recognised, under specific rules. It is one of several interactions between the two systems that is easy to miss.

What if I am both employed and self-employed?

Both sources are reported, and the combination affects the calculation in both systems. Coordination between them matters and is often handled incorrectly.

Do I file annually even in a loss year?

Yes. Reporting obligations do not depend on profitability, and a properly reported loss may carry value in later years.