Imputed Value on Usage of Company Car as Income during Swords of Iron War

At the beginning of November 2023, the Israel Tax Authority published special instructions granting concessions to employees issued a company car who were subsequently called up for emergency reserve duty under an Order 8 or placed on unpaid leave during the Swords of Iron War.

For whom is the relief relevant?

The concessions are relevant to employers in Israel who provided employees with company cars and those employees were subsequently called up for emergency reserve duty under an Order 8 or placed on unpaid leave indefinitely during the Swords of Iron War.

What concessions do employees with a company car receive during the Swords of Iron War?

According to the ITA’s special instructions, these employees are entitled to the attribution of the imputed value of use of the car as an income in proportion to the days during the month the car was in their possession (instead of attributing the full imputed value). The relative imputed value will also be calculated when the car is returned to the employer.

Are there additional reliefs for employees with company cars called up for emergency reserve duty under an Order 8?

Yes. In order to make it easier for employees called up for emergency reserve duty, and who had to use the car to report for reserve duty, the special instructions state that employers will be able to verify the return of the cars to them either with the employee or any person acting on his behalf. Moreover, the concessions will be given even if the car cannot be returned to the employer since the employee had to leave it at an Israeli military base or outpost.

Are there time limits for coordinating the return of cars to employers and/or with regard to  informing employers that the company cars are not in the employee’s possession?

Yes. Notice by an employee or by any person on his behalf regarding the return of the car to the employer, the employee’s lack of possession of the car, or the employee’s need to leave the car at an Israeli military base or outpost may also be issued retroactively, but no later than seven workdays after the completion of the reserve duty.

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Adv. Netta Bromberg, the head of Barnea Jaffa Lande’s Employment Department, Adv. Hanna Daher (partner) and Adv. Alon Davidovich of the firm’s Tax Department, are at your service to advise you on legal issues stemming from the Swords of Iron War.