When an employer provides a company car to an employee or business owner, Israeli tax law treats the personal benefit as taxable income. This taxable benefit is calculated under the "Usage Value" (Shvi Shiymush) formula.

Key Principles of Car Usage Value Taxation:

The standard usage value is calculated at 2.48% per month of the vehicle's official list price when new (adjusted for inflation).

Electric & Hybrid Car Tax Discounts 2026:

  • 100% Electric Vehicles (EV): Monthly usage value reduction of 1,200 ILS from taxable base.
  • Plug-in Hybrid (PHEV): Monthly usage value reduction of 1,000 ILS.
  • Standard Hybrid: Monthly usage value reduction of 500 ILS.

Our firm performs corporate fleet tax planning to optimize executive vehicle choices and reduce tax overheads.