The Lod District Court has ordered Israeli supermodel Bar Refaeli to pay back taxes on NIS 16 million ($4.5 million) in income that she allegedly concealed from Israeli tax authorities.
Refaeli’s legal team argued to the judge at a hearing last week that during the period in question, 2009-2010, the model was permanently residing abroad and therefore should not have to pay Israeli income tax. Her lawyers pointed to Refaeli’s relationship with her then-boyfriend, Hollywood actor Leonardo DiCaprio, and claimed she lived with him in the US during that time.
But the judge rejected those claims, and sided with authorities who insist Refaeli lived in Tel Aviv during 2009 and 2010. The court ruled that since she was not considered a foreign resident under Israeli law, Refaeli must pay the massive bill from the Tax Authority she received last June.
The ruling was handed down last week, but the court did not announce the decision until Monday.
Refaeli’s lawyers vowed to appeal the case to the Supreme Court, telling the Ynet news site that the ruling by the Lod court “ignored basic facts” in Refaeli’s case.
According to the Justice Ministry, Refaeli hid an estimated NIS 23 million ($6.1 million) of her earnings between 2009 and 2012. Her outstanding bill from the tax Authority was for her unreported earnings in 2009 and 2010, which were estimated at NIS 16 million.
Authorities say that Refaeli lied in saying she lived mostly abroad, and failed to report the income, pricey gifts and celebrity discounts she received during that time to Israeli tax authorities.
When investigators followed up on her claims of US residency, American tax authorities told their Israeli counterpart that Refaeli was registered there as a “non-resident.” Investigators also established that during that period, Refaeli owned no assets outside Israel, and did not have a residence or vehicle listed under her name in the US at that time.
According to Israeli authorities, Refaeli was actually living in two luxury apartments in Tel Aviv that were rented under her mother’s and brother’s names in a bid to conceal her country of residence.
In addition, authorities say Refaeli set up companies abroad and opened bank accounts in various countries to hide her earnings, and concealed promotional contracts with luxury car companies Range Rover and Lexus.
The ruling comes as state prosecutors prepare to indict Refaeli along with her parents on various tax offenses involving tens of millions of shekels. In January, state prosecutors informed Refaeli, along with her parents Tzipi and Rafi, that they planned to press criminal charges against them on suspicion of money-laundering and tax-dodging offenses.
Refaeli’s legal woes began in December 2015 when she was questioned for 12 hours at the Tax Authority offices in Tel Aviv, and was initially suspected of failing to report over NIS 1 million (then some $250,000) in celebrity benefits.
Later, the sum was increased to tens of millions of shekels as more information came to light.
Despite the indictments hanging over her head, Refaeli will be one of the presenters when Israel hosts the 2019 Eurovision Song Contest in Tel Aviv next month. In January, Hebrew-language media reported that Eurovision organizers gave the go-ahead despite concerns that Refaeli would be too busy with her case to devote time to the show, as well as the potential backlash for featuring a host under criminal indictment.
The model, whose many campaigns for various companies have made her one of Israel’s most recognizable faces on the world stage, has also been a mainstay of celebrity websites and gossip rags in Israel and the US.