Tax Authority, Bar Refaeli reach agreement on her status
After model requests recognition as Israeli expatriate in order to be receive tax exemption, Tax Authority rules she will pay tax on 25% of her income up until certain period, after which she will receive exemption if she is abroad more than in Israel
A compromise has been reached between model Bar Refaeli and the Israel Tax Authority. The Israeli model contacted the Tax Authority with a request to recognize her as an expatriate so that she will not have to pay taxes in Israel.
According to the agreed upon compromise, Refaeli will pay tax in Israel on 25% of her income up to a certain period – apparently the middle of 2009. After this point, she will receive an income tax exemption if she is abroad more time than she is in Israel.
The negotiations were conducted between Refaeli's lawyer and the Kfar Sava income tax assessor. At first, Refaeli tried to change her status with the Tax Authority to that of an expatriate.
However, her request was declined because she did not meet the necessary requirements for foreign residency, which include living abroad for more than 183 days a year or 425 days over three years plus proof that her center of life – permanent residence, family, life partner – is abroad.
In addition, the fact that her income is listed under the name of a company in Singapore and her bank account is managed in Cyprus did not help Refaeli's case. Because of this, a partial compromise was reached with the authorities.
Attorney Ori Kalif, who specializes and international taxation, explained, "The said compromise seems balanced and correct because the residency test of leaving Israel is graduated. Therefore, the compromise is in accordance with the principles of gradual dissociation."