Israeli supermodel Bar Refaeli has been questioned in the past two days by the Tax Authority on suspicion of tax evasion, it was cleared for publication on Thursday.
Tax Authority officials suspect that Refaeli and her mother failed to report "celebrity discounts" they received worth over NIS 1 million. They are also suspected of failing to report income amounting to tens of millions of shekels. The Tax Authority suspects the pair concealed huge amounts of income earned abroad by telling a tax assessor that Refaeli does not live in Israel.
Among other allegations, Tax Authority officials suspect Refaeli did not pay rent for her apartment at Tel Aviv's YOO Towers; paid an interior designer for his services by doing publicity for his business; received a car from a company in return for publicity - but failing to report all of that to the Tax Authority.
Legally, Israeli residents must be taxed for income received anywhere in the world, while foreign residents are taxed only for income earned in Israel. The definition of residency according to authorities is based on the number of days an individual spends in Israel and on an examination of his or her holdings in and ties to Israel such as housing, relatives, and more.
The question of Refaeli's residency has arisen during prior tax assessments. An undercover investigation purportedly found evidence that Refaeli and her mother had been misleading officials.
The Tel Aviv Magistrate's Court ruled on Thursday that in the coming six months, the supermodel will only be allowed to leave Israel with the authorities' approval and after providing a NIS 250,000 guarantee. In addition, a third party will provide a NIS 500,000 guarantee on her behalf.
Refaeli's attorneys rejected the allegations against their client. "This is a taxation issue that raises the discussion of who is considered a resident of Israel," said Giora Aderet.
Refaeli was not present at the court hearing, and she is not under arrest.
On Wednesday, she was questioned for 12 hours at the Tax Authority's offices in Tel Aviv, and was summoned for questioning again on Thursday. Refaeli's interrogation was preceded by at least three other suspects and witnesses. The model was summoned for questioning after an initial investigation into businesses she owns.
The Tax Authority claims Refaeli did not report all of her income sources. She lived at the YOO Towers in a rented apartment, but the contract was signed by her brother in order to make it appear she has no ties to Israel. Later, Refaeli moved to the nearby W Towers where she lived for three years. the contract for that apartment was signed by her mother in the same manner, even though it was the model who lived in the apartment.
Refaeli's accountant, who was also called in for questioning, was asked about the rent waiver his client received at the W Towers. The accountant said he did not know that someone else was paying Refaeli's rent for her.
A senior official at the company behind the YOO Towers told Tax Authority officials that the Refaeli family agreed that in return to the apartment, "there will be publicity, and leaks to gossip columns."
Refaeli was asked about her apartment at the W Towers during her questioning, and confirmed she is the one who has been living there. When asked why she did not tell the income tax assessor that she is renting an apartment at the W Towers, she responded, "Because it's an apartment that my mother rented for me to live at when I come back (to Israel)."
In his questioning, the interior designer told Tax Authority officials that Refaeli paid him NIS 40,000 for the work he had done at her apartment at the W Towers, despite the fact the market price was appraised at around NIS 100,000.
When asked why Refaeli paid a much lower price, the interior designer confirmed: "I gave her a 'celebrity discount.'" When asked if he was compensated in any other way, the interior designer responded: "Yes, the publicity I got."
Refaeli also signed a contract with a car company, according to which the company will provide her with a vehicle and pay for gas, repairs and upkeep, in return for Refaeli being seen and photographed with the company's vehicles. The contract included a confidentiality clause keeping the existence of the deal a secret, as well as an agreement between the two sides that Refaeli would pay the taxes for the vehicles. The deal is worth hundreds of thousands of shekels, including tax benefits, repairs, gas, ect.
At first, Refaeli received a Range Rover in return for publicity, and at the end of that contract she received a Lexus vehicle which was registered under the importer's name as a display car, even though it was used by Refaeli.
The existence of the agreements with the car companies were never reported to Refaeli's accountant.
"According to the suspicions, the attempt to cover up these facts and the attempt to distance these properties from the suspect were meant to create a false display according to which the suspect has no ties to Israel, as well as to avoid having to report the income from these barter deals," the Tax Authority claimed in court.
According to Tax Authority suspicions, Refaeli's mother Tzipi was the one behind the deals made with commercial entities and provided false information. She said that she did not report, nor did she think she needed to report, these agreements to the Tax Authority or to the accountant because she did not consider the car deals as illicit benefits.