Refaeli Suspected Of Tax Evasion, Grounded Over Taxes

Photo Credit: Alexis

Court Bars Bar Refaeli from Leaving Israel over Tax Evasion - The Israel Tax Authority told a Magistrate’s Court in Tel Aviv on Thursday that celebrity model Bar Refaeli is suspected of tax evasion amounting to millions of dollars, Israeli media reported. Refaeli and her mother, Tzipora, are suspected of not submitting complete reports on the model’s income from working abroad, of not reporting “celebrity discounts” in housing, use of vehicles and other benefits valued at more than $250 thousand, and presenting a false documentation to the assessing officer in Kfar Saba regarding the residency status of the model. The mother and daughter were released under restrictive conditions: they were required to deposit a $125,000 bail, and are prohibited from leaving Israel for 180 days.

Refaeli was interrogated for 12 hours on Wednesday by the Tax Authority offices in Tel Aviv on suspicion of tax evasion. During the interrogation, the authorities asked the CEO of one of the largest construction companies in Israel to testify on the extent of discounts that were granted to the model when she purchased an apartment together with a family member.

Refaeli’s attorney insisted the charges against his client stem mainly from issues of verifying her residency in Israel. The Tax Authority says Refaeli lied about her residency.

The Tax Authority has run an undercover investigation against Refaeli which turned up among other things that she received for personal use a Range Rover (value in Israel roughly $100,000) in exchange for advertising and PR. At the end of that contract Refaeli received a Lexus, which also allegedly remained registered under the importer’s name as a demonstration vehicle, when in fact Refaeli used it in exchange for publicity work. The Tax Authority suspects that the blurring of these facts regarding her ownership of these assets were intended to help Refaeli create a misrepresentation that she has no ties to Israel and also to avoid tax payments for these barter transactions.

Despite the fact that over the years 2009-2012 Refaeli had apartments for her use in Israel, when asked about it by the tax assessor she said through her representative—most likely her mother—that “it has already been previously reported that Bar has not rented residential apartments in Israel during the relevant years.”

The arraignment request filed by the Tax Authority said that the question of Refaeli’s residency has implications for the legal taxation of her income. The tax claim is against tens of millions of dollars in income from work abroad that were not reported to the Israel Tax Authority. According to the Income Tax Ordinance, an Israeli resident may be taxed on income earned worldwide, whereas a non-resident is taxed only on income earned Israel.