Bar Refaeli Loses Tax Evasion Case, Will Pay Millions of Dollars

Supermodel loses in court because her relationship with Leonardo DiCaprio did not replace her ties in Israel – or her legal residency

Bar Refaeli at the Dior Fall-Winter fashion show, Paris, February 26, 2019.
Thibault Camus,AP

Israeli supermodel Bar Refaeli will have to pay tens of millions of shekels in unpaid income tax for the years 2009 and 2010 - years she claims she was living in the United States with Leonardo DiCaprio - after a district court rejected her appeal.

Refaeli filed a civil suit in the Central District Court in Lod appealing the Israel Tax Authority’s ruling that she was an Israeli resident during those years – and owed unpaid taxes.

Refaeli claimed in court that she was in a serious relationship during that period with actor Leonardo DiCaprio and was living with him in the U.S. and was not an Israeli resident. Therefore, she claimed she did not owe the money because she was not required to pay Israeli taxes on income earned outside of Israel.

The main issue under dispute was where her "center of her life" was located – in Israel or overseas.

Her lawyers said they will appeal the ruling to the Supreme Court.

Refaeli and her parents are also facing indictment on criminal charges of tax evasion, money laundering and perjury. The indictment will not be filed until Refaeli is either granted a hearing with the tax and economic department of the State Prosecutor’s Office, or waives her right to the hearing.

Judge Shmuel Bornstein ruled that Refaeli presented no real evidence that she had cut off her ties to Israel, or intended to, during those tax years and the center of her life continued to be in Israel – so she is an Israeli resident for tax purposes. In addition, she even met the residency requirements concerning the number of days she spent in Israel during 2009, and while she spent less time in Israel in 2010, the amount of time she spent here indicated that Israel was still the center of her life, the judge said.

Refaeli had family, financial and social ties in Israel during those years, the judge said and she did not have a permanent home in the United States, only in Israel. “Despite the relationship she conducted with DiCaprio during the tax years under appeal, her family and social ties were still planted in Israel,” and she was unable to prove she cut off these ties to Israel, ruled the judge. She was unable to prove “the relationship she conducted with DiCaprio was stronger than the strength of her family and social ties in Israel.”

In addition, Bornstein noted that DiCaprio did not appear to testify on Refaeli’s behalf, and no evidence was provided as to how he viewed their relationship or his intentions on the matter.

In the criminal case, Refaeli is accused of hiding more than $6 million between the years 2009 and 2012, during which time she told tax officials in the United States that she was a resident of Israel – while at the same time telling Israeli tax authorities she was a U.S. resident. During that time, she allegedly rented and purchased apartments in Israel. She also allegedly concealed nearly $2 million in income during the years 2005-07.

Refaeli also is accused of receiving luxury items, such as the use of luxury vehicles, in exchange for publicity for the companies – and she did not declare this income to tax officials.

Her mother, Tsipi, is accused of hiding nearly $1 million in income she received for acting as her daughter’s agent and for making foreign currency deals that she did not disclose.

The case began in December 2015, when Refaeli was accused of hiding about $250,000 in celebrity benefits.