Court verdict: Bar Refaeli to pay NIS 8 million over unreported income

Ruling, handed down last month but only publicized Sunday, shows judge skeptical that supermodel’s rent was paid without her knowledge, derides her ‘evasive’ account

Model Bar Refaeli poses for photographers upon arrival at the Dior ready-to-wear Fall-Winter 2019-2020 collection in Paris, February 26, 2019. (Thibault Camus/AP)
Model Bar Refaeli poses for photographers upon arrival at the Dior ready-to-wear Fall-Winter 2019-2020 collection in Paris, February 26, 2019. (Thibault Camus/AP)

Supermodel Bar Refaeli was ordered to pay NIS 8 million ($2.25 million) plus another NIS 120,000 ($33,710) in court fees in a multi-million shekel tax case, according to last month’s verdict, which was released by the court on Sunday.

The Lod District Court on Sunday publicized its ruling rejecting an appeal by Refaeli, who is accused of trying to conceal earnings from tax authorities by claiming she was living abroad a decade ago, during her romantic relationship with film star Leonardo DiCaprio.

The verdict, handed down on April 10, found Refaeli’s version of events “evasive,” and her claim that rent for her luxury apartment was paid without her knowledge to be “contrary to common sense.”

Refaeli’s legal team had argued to the judge that during 2009-2010, the model was permanently residing abroad and therefore should not have to pay Israeli income tax. Her lawyers underlined Refaeli’s relationship with her then-boyfriend, Hollywood actor DiCaprio, and claimed she lived with him in the US during that time.

But the judge rejected those claims and sided with tax authorities, who maintain that 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 that she received last June.

According to the published verdict, Refaeli was found to have lived in Israel for 185 days in 2009 and 131 days in 2010, enough for her to be considered a resident of the country by tax authorities. Overall, during 2006-2012, she spent an average of 145 days in Israel each year. She also declared to US tax authorities that she was a resident of Israel.

“At the beginning of the period, Rafaeli’s parents’ home in Hod Hasharon was a permanent home, and after that her permanent home was a rented apartment in the Yoo Towers. In the last months of the period in question, Rafaeli moved to another rented apartment in the W Towers, that was only for her use,” according to the court papers.

Israeli model Bar Refaeli and US actor Leonardo DiCaprio during the ceremony for the ‘Cinema for Peace Gala 2010,’ during the International Film Festival Berlinale in Berlin, Germany, February 15, 2010. (AP Photo/Joel Ryan)

According to the verdict, the W and Yoo tower projects, both located in Tel Aviv, paid for her rent in order to publicize that she was living in the buildings. Claims that the payments were made without her knowledge were unproven and were “contrary to common sense,” the court found.

In light of her “evasive version,” the judge maintained that “it was difficult to give it full confidence.”

Refaeli’s legal team had requested that details of her earnings during the 2009-2010 period be barred from publication. The court, however, allowed the details to be released on Sunday. The documents said that “in accordance with the assessment” made by Refaeli, her taxable income amounted to NIS 8,593,955 ($2,414,084) in 2009 and NIS 7,860,987 ($2,208,190) in 2010.

Refaeli’s lawyers have vowed to appeal the case to the Supreme Court, telling the Ynet news site last month that the ruling by the Lod court “ignored basic facts” in Refaeli’s case.

The court ruling last month on the tax bill came 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 and her parents, Tzipi and Rafi, that they planned to press criminal charges against them on suspicion of additional money-laundering and tax-dodging offenses.

Authorities said 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.

According to the Justice Ministry, Refaeli hid an estimated NIS 23 million ($6.1 million) of her earnings between 2009 and 2012.

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 emerged.

Israeli supermodel Bar Refaeli with her mother Tzipi Levin in their home. 2001. (Moshe Shai/FLASH90/File)

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 week. 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 facing prosecution.

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.

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