BAR REFAELI REACHES AGREEMENT IN TAX CASE

Leonardo DiCaprio's on/off girlfriend Bar Refaeli has settled an ongoing dispute with tax officials in her native Israel - after the supermodel was accused of owing thousands of dollars in back payments.

Refaeli's lawyers argued the catwalk beauty should be declared a non-resident of Israel because she spends so much time working abroad.

Officials at the Israel Tax Authority claimed the country is still Refaeli's home and demanded she settle her payments.

A compromise has now been reached in the ongoing dispute, with Refaeli's legal team agreeing for the catwalk beauty to pay 25 per cent of her income in tax up until mid-2009. After this point she will receive an income tax exemption if she is abroad for more than 183 days a year, according to Ynetnews.com.