Model Bar Refaeli arrested for tax evasion in Israel

Israel's most famous model Bar Refaeli was arrested and questioned for allegedly evading taxes on millions of dollars of income from abroad by lying about her residency, Israeli authorities said Thursday.

Refaeli is also suspected of receiving benefits of "over a million shekels" (257,000 US dollars, 237,000 euros) in the form of free accommodation in luxury apartments and cars she did not report, Israel's Tax Authority said in a statement.

Refaeli's mother Zipora was also arrested, with the Tax Authority estimating the unreported income from abroad at "dozens of millions of shekels".

Israeli citizens who are not residents are exempted from reporting to tax authorities on income from outside the country. The Tax Authority alleges Refaeli and her mother created the false appearance of the top model residing outside of Israel in order to avoid paying the full extent of taxes.

It said she has lived in luxury apartments registered under her mother and brother's names. Refaeli was also supplied a free Range Rover and Lexus for her use in return for her being photographed in the cars, without the vehicles being registered under her name.

An undercover investigation revealed a contract between Refaeli and the management of a luxury complex in Tel Aviv, according to which gossip columns would receive "leaks" regarding her residency there to promote it, the authority alleged.

Refaeli and her mother are also suspected of receiving "celebrity discounts" which should have been reported as income, such as on the interior design of Refaeli's apartment and when Zipora bought an apartment.

An undercover investigation culminated in a raid on Refaeli and her mother's home on Wednesday, and on Thursday a Tel Aviv court ordered their arrest and release on bail.

Both were forced to deposit their passports and are not allowed to leave Israel without permission for 180 days. There was no immediate comment from Refaeli's lawyers. This is not the first time the 30-year-old swimsuit model, who in the past dated actor Leonardo DiCaprio, allegedly found loopholes in Israeli law to her benefit.

She had in the past stirred controversy when she evaded her two years of mandatory military service by marrying a friend of her father's, only to divorce him a short while later. In September, she married Israeli businessman Adi Ezra. (AFP)