Do you own a leasing car?
Hold tight, the benefit is on the way (Photo: AP)
Tens of thousands of attached car recipients had a bad surprise in their bank accounts this month: their net salary dropped by hundreds of shekels.
In January, the Tax Authority announced that it is updating the tax benefits for owners of hybrid, plug-in or electric attached vehicles in the value-of-use section.
Value in use is the tax paid by an employee on the vehicle attached to his employer.
According to the law, an additional 2.48% of the value of the car as new is added to the employee's salary for the purpose of calculating tax.
However, in order to encourage a switch to less polluting cars, those who choose them as an attached vehicle receive a tax discount, depending on the type of vehicle they received.
As part of the update, it was determined that owners of hybrid vehicles will receive a reduction of 530 NIS (instead of 500), owners of plug-in cars 1,050 NIS (instead of 1,000) and owners of electric cars 1,260 (instead of 1,200 NIS).
Electric cars became more expensive at the beginning of the year and are expected to become more expensive again every year (Photo: Keinan Cohen)
But in March salaries, the first ones calculated according to the tax updates for 2023, the compact car recipients suffered a blow.
At the same time as the benefit was increased by a total of NIS 30-60 per day, the calculations were also updated to reflect the increase in car prices over the past year, about 2% on average according to the calculation of the Autocom website, and the effects of inflation, which jumped to 5.3% in 2022.
And so, when the tax was calculated according to the current and expensive car prices, and with the addition of the effects of inflation, many Israelis discovered that the salary that went into their bank account was NIS 200 to 500 less, just because of the compact car section.
Those who took the brunt of the blow were the owners of the green cars, who received a significant tax increase in January: the purchase tax on a fully electric vehicle was doubled from 10% to 20% and the maximum discount ceiling dropped from NIS 75 to 60,000.
In a plug-in hybrid vehicle, the purchase tax increased from 40% to 55% and the maximum discount ceiling decreased from NIS 40 to NIS 30,000.
Among the compact car buyers, there are only a few thousand who drive 100% electric cars, but there are tens of thousands who have chosen plug-in vehicles, such as the Kia Niro, MG EHS and others.
Due to the higher price of electric cars, they became more expensive this year than plug-in vehicles.
For example, in Skoda, the electric Skoda Aniac went up by NIS 25,000 overnight, while the price of its half-brother, the Volkswagen ID.4, jumped by NIS 20,000.
Hyundai Ioniq 5 became more expensive by NIS 14,000.
At BYD, the price of the Eto 3, the electric hit of the last few months, jumped by NIS 7,000-10,000 depending on the level of finish.
Even the small Fiat 500 registered a price increase of NIS 10,000.
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Taxes Authority
value in use
Leasing