The financial and tax implications of a company's car

Ø An attached vehicle as a wage component

Sometimes, the employer will give you a car as part of your salary - or instead of a raise.

The employer records the vehicle expenses as a recognized expense for tax and the employee pays the tax on the benefit. Every car, even if it is old, will be calculated at a rate of about 2.48% of its purchase price. Even if the market price is 30k and the purchase price was 120k, then the value will be determined by the purchase price. In this way the ITA sought to cover all the personal use the employee makes of the vehicle granted by the company

What is the meaning of an attached vehicle in the salary

• is not a provident fund component (6.5% employer without tax up to the ceiling)

• Is not a component for provisions for compensation (8.33% of salary without tax up to the ceiling) and according to the Dismissal Compensation Law does not require payment for it (HCJ 4838/03 Jewish National Fund v. Jerusalem National Labor Court and Gra Koren, granted on 17.1.05)

• is not part of any insurance included in the pension-life insurance and disability insurance

• Is not a component covered by a study fund (7.5% employer without tax up to the ceiling)

• Once there is an attached vehicle, travel that is a legal component in a coupon up to NIS 423 (free monthly depending on travel distances) will not be accepted.

• Is not a component of a vacation for the redemption of vacation or for vacation (salary of one day for each month that increases in ascending ranks)

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