Bar Refaeli's tax evasion hearing begins in Israel

Bar Refaeli Photo: Shlomi Yosef

It is alleged that the super-model and her mother Tzipi Refaeli concealed NIS 6 million in income from the tax assessment office.

The hearing for alleged tax evasion by Israeli international model Bar Refaeli has begun. The hearing is being held by State Attorney's Office Taxation and Economics representative Adv. Liat Ben-Ari. Last January, the State Attorney's Office Taxation and Economics Department notified Bar Refaeli and her parents, Tzipi and Rafi Refaeli, that it was considering indicting them for tax evasion, subject to a hearing. Bar Refaeli's parents are also suspected of money laundering.

According to the suspicions record sent to Bar Refaeli, she filed returns with the tax assessment office for 2006-2007 stating that she was not an Israeli resident, and did not include income from her overseas work in these returns. Under a compromise agreement signed in 2009, tax was to have been paid on all of Bar Refaeli's 2005-2007 income in Israel and abroad. It is alleged that Bar and her mother Tzipi Refaeli concealed NIS 6 million in income from the tax assessment office.

Bar Refaeli is suspected of founding companies overseas, opening accounts around the world, and depositing her income in them. In the tax returns and declaration of capital filed by the suspects, they stated that Bar Refaeli had no income in Israel, and that she was a foreign resident.

The suspects allegedly communicated false information and concealed relevant information in tax assessment discussions for 2009-2012 in order to cover up Bar Refaeli's connections with Israel. At the same time, Bar Refaeli allegedly made presentations to the US tax authorities that she was not a US resident, and was living in Israel.

The income that was the subject of these concealment actions amounted to millions of shekels a year in 2009-2012 - a total of over NIS 23 million.

It is alleged that during this period, Bar Refaeli rented and purchased apartments in Israel, but because Bar and Tzipi Rafaeli feared that these facts could be used by the tax assessment office to prove that the center of Bar Refaeli's life was in Israel, they left her name out of the records for the apartments, thereby making false representations to the authorities.

According to the suspicions record, Tzipi Refaeli is suspected of omitting NIS 3 million in commission received as a result of her activity as Bar Rafaeli's agent. She allegedly deposited the commissions in overseas bank accounts in the name of Bar Refaeli or companies controlled by her. The Israel Tax Authority issued an order for obtaining the overseas bank records of Bar and Tzipi Refaeli. The records were delivered only two years after the order was issued, following legal proceedings by the Tax Authority.

Bar and Tzipi Refaeli are also suspected of conducting barter deals that generated millions of shekels in revenue without reporting them to the authorities, as they were legally required to do, including financing the renting and purchase of an apartment and the use of luxury vehicles in exchange for advertising and public relations. Tzipi and Rafi Refaeli are also suspected of money laundering by declaring that they benefited from accounts in which the actual beneficiary was Bar Refaeli.

When the suspicions record was sent to the Refaeli family, the family was given the option, as legally required, of having a hearing in the State Attorney's Office Taxation and Economic Department before a decision is made whether to indict them. Adv. Moshe Mizrahi, Adv. Udi Barzilai, and Adv. Ruth Litvak from the Iny Litvak Lazar & Co. law firm are representing Bar Refaeli in the hearing. Adv. Ofer Rachmany from the Udi Barzily law firm and Adv. Michal Rosen-Ofer from the Chen, Yaari, Rosen-Ozer & Co. law firm are representing Tzipi and Rafi Refaeli.

Two legal theaters

Bar Refaeli is an Israeli model who developed an international modeling career. Questions began to arise about her tens of millions of shekels in income and to which country she would pay taxes.

This question depended on the question of where Bar Refaeli resided during these years. She claims that she moved to the US in 2007, among other things in order to be close to Hollywood superstar Leonardo DiCaprio, her husband at the time, and therefore did not owe tax in Israel. The Tax Authority claims that she deceived the state about her place of residence and actually lived in Israel during all of the years in dispute, and therefore owes tax in Israel.

The dispute about her residence is being heard in two legal theaters. The first is the civil theater, in which the state is demanding that Bar Refaeli pay millions of shekels in taxes. The Lod District Court recently ruled against Bar Refaeli in the case, and required her to pay tax for 2009 and 2010, when she claimed that she was not an Israeli resident. In its ruling that Bar Refaeli had to pay tax on income amounting to tens of millions of shekels, the court ruled against each of her explanation that she had no residence during the disputed years, was not an Israeli resident for tax purposes, and therefore did not owe tax on her income during those years.

The other and more dramatic theater is the criminal theater, which began when Bar and Tzipi Refaeli were arrested in early 2016 and questioned by Tax Authority investigators on suspicion that they had not reported their full income and had made false representations to the tax assessment office about Bar Refaeli's residence, thereby evading tax on overseas income believed to be in the tens of millions of shekels.

The suspicions record sent to Bar Refaeli, which was exclusively reported in "Globes" in January, alleges that she fraudulently concealed tens of millions of shekels in income in 2009-2012. An investigation of the affair was begun in the investigative section of the Tax Authority's Tel Aviv Tax Assessment Offices.

Presumption of innocence: Bar Refaeli, Tzipi Refaeli, and Rafi Refaeli have not been convicted of any crime. Even if it is decided to indict them, subject to a hearing, they are merely suspects, and are entitled to be presumed innocent.

Published by Globes, Israel business news - en.globes.co.il - on May 1, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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Bar Refaeli Photo: Shlomi Yosef
Bar Refaeli Photo: Shlomi Yosef
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