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Israeli supermodel Bar Refaeli ordered to pay millions in back taxes

The Israeli supermodel misrepresented her permanent residence in order to dodge Israel’s higher taxes.

By Joseph Wolkin, World Israel News

Three weeks after Israeli supermodel Bar Refaeli was initially told she will have to pay taxes for over NIS 16 million  (almost $4.5 million) that she earned in 2009-2010, a court order on Sunday made it official.

Judge Samuel Bornstein said records prove that Ms. Refaeli was in Israel for 185 days in 2009 and 131 days the following year, according to Globes. Those time frames made her an Israeli resident in those years according to Israeli law.

The court determined that Ms. Refaeli owed NIS 8,593,955 for 2009 and NIS 7,860,987 for 2010.

Ms. Refaeli, who will host the Eurovision Song Contest this week in Tel Aviv, will pay the over NIS 16 million, as well as an additional NIS 120,000  in court fees. Ms. Refaeli had said prior to the state prosecutor’s Sunday decision that she would appeal the case to the Israeli Supreme Court.

The supermodel claims she was living mostly in the United States at the time with her then-boyfriend, actor Leonardo DiCaprio. However, an Israeli district court found that her primary residence was in Israel during those years.

She filed a civil suit in the Lod district court, appealing the Tax Authority’s ruling, which claimed she lived in Israel during the time she dated DiCaprio and that she would have to pay taxes on money earned during that span.

In late December, news of Ms. Refaeli’s possible indictment surfaced. Her mother, Tzipi, who also worked as her modeling agent, was similarly subject to fines in the money-laundering scheme, according to reports. They wanted to dodge Israel’s higher taxes.

Her mother is suspected of lying to authorities about where her daughter lived during this period. She also allegedly hiding information amounting to income of NIS 23 million for the years 2011-2012 .

According to Israel’s tax law, an Israeli resident would be liable to pay tax on all income earned abroad whereas a foreign resident would only pay taxes on income generated within Israel.

Another six million shekels were allegedly hidden from the taxman during a previous compromise agreement signed in 2009, when Ms. Refaeli claimed to have paid all the taxes she owed in Israeli and overseas income during 2005-2007.

Ms. Refaeli and her parents still face indictment for several tax evasion schemes.