In the past two years, the tax authority has been aggravating the attitude of Israeli relocation people, and Bar Refaeli has reached them just in time • "It has become a warning sign"

• Bar Refaeli at District Court hearing // Photo: Joshua Yosef

  Photo:

  Joshua Joseph

For one thing, all the factors we interviewed for this article agree. The Bar Refaeli affair is no longer an issue in the Chronicles of the Tax Authority and the State of Israel over the years, but one that raises questions, the answers of which will create precedent upon which the various authorities will rely over the coming years. Rafaeli, because of her public image and not only because of the huge sums her family has allegedly raised, will face the storm. How will the topic end? Of course, it depends on who you ask.

From a public standpoint, there is a feeling that Rafaeli and her mother, like other celebrities over the years, are getting "celebs", or alternatively that Rafaeli's mother, Tzipi, is about to go to prison for acts allegedly committed by her daughter. Both things are reconsiderable because opinions within the tax authority are divided. Some of the parties, even in the PA itself, seem to agree that a civil and non-criminal agreement would have ended long ago, with lesser charges.

But the infatuation of the law authorities in the case made it such that the entire state waited for the final decision. Apparently, this is a victory for the tax authority. In the district court's ruling, the model was required to pay NIS 16 million in income taxes, which she earned from working overseas for about two years, because she was a resident of Israel during those years, and not a U.S. resident as she claimed.

The talks we held with senior officials this week show a very clear picture: The tax authority has for the past two years focused on the relocation issue of many Israelis who chose to live their lives here and abroad, as a kind of non-citizen: "Raphael has become a necessity The warning sign that tells citizens that they are not celebs like you. If you intend to make tax combinations on the housing issue, consider that this is the high price you are about to pay, "as a senior tax adviser told us this week.

Back to the Buzaglo test

"In a previous ruling in the case of a famous figure, the court cited the famous' Buzaglo test 'and wrote:' The defendant's case must be put on the low and raised people test together. On the one hand, one defendant and recently thousands of Israel. The law is by virtue of its status (the "Buzaglo test"). On the other hand, no one will excel on its face. There is no liking for a bar of the law, in the name of an artificial equality test ... "," explains attorney Daphne Lang, who has been in the commercial, real estate field for years. And taxation, and is considered one of the top executives in the field.

"After these things, the court acknowledged that it has difficulty ignoring the public figure it faces. The trial is the trial of a defendant, flesh and blood. His photograph and image are part, if not all, of the matter at issue. To my mind, these things to a certain extent reflect reality, as the pendulum ranges from cases where one can see a lenient and forgiving attitude toward those in power and against a strict attitude for the sake of being seen and seen. "

In other words, was it last Tuesday, when Rafaeli gave birth to a good fortune after having two daughters, at an event that reached the headlines but not only, could the event go under the radar of taxpayers? Judiciary? The recent and distant past cases have in most cases proved not to be the case.

Preferred destination - Cyprus

In recent years, celebrity tax evasion has been commonplace: Eyal Golan has charged NIS 2.5 million in taxes, Kobe Peretz dropped NIS 5.2 million in taxes and NIS 800,000 in transactions and five convictions of omission, five felony charges And the existence of false accounts, five offenses of fraudulent use, fraud and subjugation, and income tax offenses, in the reporting of offenses including false knowledge and violation of the Value Added Tax Law. He was sentenced to one and a half years imprisonment and a fine of NIS 175,000.

Moshe Peretz was convicted of tax evasion amounting to NIS 1 million and to tax evasion of NIS 140,000. The court also sentenced him to four months probation and a financial fine, and these are only the cases of recent years. Even before that, Judah Barkan could be mentioned and alternatively the affair of the Premier League referees who have taxed.

"There is a difference between each of the cases," explains the former tax official, who currently works in the field. "Based on my knowledge of the system, what seems to be interfering with the IRS is that the people of Bar Refaeli were constantly busy with tricks, which showed that they were constantly thinking How to indemnify the tax authorities.

"A record in Israel, not a record in Israel. The apartments where she lived are records of her brother, all kinds of exercises that showed a very cold thought process, unlike other cases where people were not sophisticated and admitted that they simply had no idea about money management."

That's why Bar Refaeli's story is different and makes such a noise. By 2017, Israelis going abroad for relocation were less concerned with the tax authority. For years, the relocation couriers went out and returned without anyone noticing unless some asked for such tax returns and others, and aroused interest. The taxes.

Only then was Amendment 223 to the Income Tax Ordinance of 2016, which stipulated that every Israeli citizen who performs a "relocation" must report to the tax authorities and explain why he thinks he is not taxable in Israel. The amendment concerns the "presumption of days" test, which determines who is a resident of Israel for tax purposes.

Legal complexity. Lang

According to the Income Tax Ordinance, a resident of Israel is taxed on income generated worldwide, while a foreign resident is only taxed on income he has generated in Israel. According to the amendment to the law, a person who claims to be a non-resident of Israel but who has "the presumption of days" and who is found in Israel for more than 183 days a year, will be required to report on the facts on which he claims that he is not a resident of Israel, to whom he attaches the supporting documents. , In addition to submitting a report on his income in Israel. Of course, this change applies not only to famous cases like Bar Refaeli, but to dozens of high-tech, doctors, lawyers and businessmen.

Raphaeli just fell into a rural income tax. Encourage that the rabbi, a tax advisor and lawyer who specializes in the matter, explains: "In recent years, we have sadly witnessed many cases of fictitious relocation. People are even divorcing and saying 'we do not live here', 'my wife does not live here' and other such inventions. Physically you can do your job anywhere in the world, causing many Israelis to move their life center to other places, such as Cyprus - where taxation is less than Israeli and becoming a popular destination for Israelis. Tax authorities do not yet know how to deal with this, so We are constantly seeing amendments to the law, and more amendments but not something that is obvious, because everyone is clear D. studying this topic. "

From Lauren Hill to Messi

In the book by American journalist Cooper Lawrence, "Celebrity Worship," the author sought to present a thesis on tax evasion: "Tax evasion is another manifestation of their narcissism. They are used to getting a different attitude everywhere they go, from the neighborhood writer to the plane, and very quickly you get used to it. Living this life, so they really believe that the federal government should also treat them in a special way. "

Indeed, one of the charges against Rafaeli is the value of the gifts she received and did not report to the IRS, thinking she did not need to report at all. But the IRS has sharpened the interest in recent years that Celeb assumptions are also mandatory in tax reporting. And of all these phenomena, of course, it is evident that we simply copy from the world.

Lauren Hill, one of the famous US singers, spent three months behind bars after raising $ 1.8 million in taxes. In 2009, the U.S. Internal Revenue Service accused Nicholas Cage of owing her no less than $ $ 6.2 million in 2007 revenue.

In Italy, a country that is not foreign to corruption, Dolce and Gabbana, the two huge fashion designers, have been accused of taxing a billion euros. In Spain, Argentine Lionel Messi was charged, along with his father, with $ 5.3 million in tax evasion between 2006 and 2009 through fraudulent documents. Messi, among the top ten athletes in the world, said at the time that "I never take care of these things and neither does my father, these are our finance managers," and asked to take his father along with him from the affair. Messi's father, just like Tzipi Rafaeli, was sentenced to prison but did not run him because Spanish law allows the purchase of jail time money in these cases.

These phenomena are truly isolated examples of a global trend. The question is whether Bar Refaeli will be the latest celebrity to get involved with the tax authorities. History shows that the chances are slim. "In the end, I estimate that the IRS will try to reach a compromise to get all parties out of the tree. Nobody has any interest in this business going out of proportion and going to court so that it ultimately decides and harms the tax authority's activities, which may also damage the organization's image."

While Lang concludes from the legal angle: "There is no doubt that public figures have an additional burden besides the pending charges against them, because their names are blamed in the media. However, many times public figures also have a better ability, in terms of public relations and status, to deal with The pending litigation is the case when the debate on their case, as a media-defined case, gets the proper attention. Many more are the cases of people who have to deal with their mothers with the weight of the accusations against them - as a whole - another case in the justice system. "