Company Ordered to Pay Hundreds of Thousands in National Insurance Fees for Employee Vehicles
Translated & summarized from Bizportal by baba
The story in 5 lines · by baba
- Company must pay hundreds of thousands in National Insurance fees for employee vehicles.
- National Labor Court ruled potential for private use determines contribution liability.
- Company failed to implement strict policies preventing private vehicle use.
- Legal opinions do not serve as a defense in civil proceedings.
- Final payment will be recalculated, excluding the controller's vehicle.
The National Labor Court has ruled that the electrical and infrastructure company A. Litman must pay hundreds of thousands of shekels in National Insurance fees for vehicles provided to its employees. The court rejected appeals from both the company and the National Insurance Institute regarding the classification of these vehicles.
A. Litman, which employs approximately 30 people and is controlled by Ronen Litman, argued that some vehicles were operational and not assigned to specific employees, thus exempt from National Insurance contributions. However, the court found that employees used these vehicles for private purposes, a key factor in determining they were assigned company cars, which are considered part of an employee's salary and subject to contributions.
The National Insurance Institute initially demanded 1.1 million shekels from A. Litman, a sum that could have risen to 1.3 million shekels if the company pursued further legal action. The lower labor court had previously dismissed A. Litman's appeal, finding that the vehicles were not purely operational, citing evidence of private use and the absence of strict company policies to prevent it.
Justice Amitsur Itam of the National Labor Court upheld the lower court's decision, emphasizing that the potential for private use, not just actual use, is the determining factor. He noted that the company failed to implement clear and stringent procedures to ensure vehicles were not used for personal reasons, and evidence suggested a lack of enforcement of the prohibition on private use.
The court also rejected A. Litman's defense based on a legal opinion, stating that such opinions are not a valid defense in civil proceedings, including tax-related matters. The National Insurance Institute is now required to recalculate the payment owed by A. Litman, excluding the amount attributed to the vehicle used by Ronen Litman himself, which was deemed to have been used for company purposes.
Read the original at BizportalMentioned
The same event, reported separately by each outlet. Open a few to compare what different newsrooms emphasize — and what they leave out.
Not the same event — other stories that share this one’s people, places, or theme: background, reactions, and follow-ups.
