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I'm not sure why this is the case in this country, but right now in Germany some companies provide leases on the cars. It turns out it's a tax reduction and "su
by vl 13y ago
I'm not sure why this is the case in this country, but right now in Germany some companies provide leases on the cars. It turns out it's a tax reduction and "support local industry" at the same time - if same amount of money is just paid as salary, combined taxes for company and employee are higher. And it also supports local economy since lease choices are for german cars only. And I heard that same leasing practice is common in Israel as well.
As a strange quirk they also pay for gas used by these leased cars. As a result, my friend with such lease always tries to do vacation in spots reachable by driving - it's just much cheaper for him, even if he has to drive for two days to get there.
- smsm42 13y agoTax reasons are the most common source of fringe benefits. As you mentioned, in Israel, a company car is a commonplace benefit among hitech workers, while in the US it is almost unheard of - because of the differences in how this benefit (and cars in general) are taxed. Though with recent change in Israel's tax code this became less popular, but some decade ago a company-provided car was an assumed part of the standard benefits package. However, we have been talking about housing being provided by employer because there's no other means to get housing, so this is completely different case - here company cars are the function of government-introduced tax law, not of prices of the cars.