The tax authority has released a whole load of tables at http://www.mof.gov.il/taxes/docs/sikum130807.pdf with the intention of showing that it is really really unfair that someone who receives a car allowance in practice pays hundreds more sheqels in tax etc than someone with a company car, and that they have agreed with the Finance Committee of the Knesset to reduce their demands of the latter and are cutting taxes so much anyway that the average middle income couple with two jobs and one company car won't notice the difference.

The increases will now not take effect this year and will be spread over tax years 2008-2011, at the end of which the imputed income is to be as follows:

Two-wheeled vehicles over 33 HP: 750 (smaller-engine vehicles are exempt)

The self employed will now receive a minimum tax deductible expense of 45% of overall car expenses instead of 25% as at present. The minimum for employers remains 25% + the imputed income.

I wish to remind clients running company cars that the groups change from one year to another and you are urged to check EACH TIME a car comes up for test and advise me whether there has been a change relating to the specific vehicle. People tend to assume all company cars are in Group 2 and it just ain't so.

Finally, the tax authority has in a one sided move without consultationor even providing proper information to the public decided, retroactive to January, to cancel the 13 year old official arrangement, whereby a company has been deemed for income tax purposes to own cars registered in the name of its owners subject to receipt of certain guarantees. Without getting into an ethical argument over whether the motives for the arrangement are the sort of thing decent society should permit, I fully back the protest lodged by the Institute of CPAs against the way this change has been handed down, retroactively, in breach of the Begin law protecting personal property from Government (why did you think you had to live in Gush Katif to lose that protection?) and almost in secret. If you have been taking advantage of the arrangement up to now my suggestion is to make sure that you check with me around November (if you have not heard sooner) as to whether you need to transfer legal ownership of your car.