Bar Refaeli tax evasion case
The long-standing Bar Refaeli tax evasion case has reached a conclusion. The Israeli supermodel will be doing nine months of community service. And her mother is set to be jailed after signing a plea bargain agreement to settle the case.
The deal over the case is built around the supermodel’s worldwide income and alleged attempts to downplay her ties to Israel. Her mother, Zipi, who acted as her agent, will be sent to prison for 16 months.
In addition, they have been ordered to pay a £790,000 fine on top of millions of back taxes.
Refaeli is popular in Israel but the case has tainted her reputation there.
Supermodel’s residency in question
The case revolves around the supermodel’s residency several years ago when she was in a relationship with Leonardo DiCaprio and travelled frequency around the world during high-profile campaigns.
In Israel, tax law is determined primarily based on whether the person has spent most of a calendar year in the country. Rafaeli said that in certain years she had not and therefore did not have to declare her worldwide income.
The charges against her said the model earned £5.69m between the years 2009 – 2012 while claiming to live overseas.
But prosecutors rejected her claim and charged her with providing incorrect tax information.
Rafaeli’s previous appeals were rejected by an Israeli court because her relationship with DiCaprio did not qualify as a “family unit.” Therefore, she could not claim his US home as her residence.
Tax evasion not intentional
Lawyers for the model say the plea bargain proves she had not intentionally evaded tax payment.
“In the relevant time period, Bar was in her early 20s, was working as an international model and was not involved in financial matters,” they said in a statement. “Today she is taking responsibility for mistakes that were made.”
Her mother was charged with failure to report income, avoiding paying taxes and aiding someone else in evading tax payments.
The indictment said she signed leases for her daughter under the names of other family members to blur Reafeli’s actual residency status. Furthermore, it claims she held back from declaring her own income as her daughter’s agent.
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