Tax Authorities: Steinmetz Owes $1.1 Billion

(IDEX Online News) – Israeli diamond billionaire Beny Steinmetz is battling a NIS 4.1 billion ($1.1 billion) tax charge. Tax authorities are contesting Steinmetz's claim that he does not own or control the Beny Steinmetz Group, but serves only as an advisor to them.

Steinmetz claims he is a member of the class of beneficiaries of the various entities owned directly or indirectly by two foundations, the Balda and Vessna Foundations. The foundations are what are generally known and referred to as "The Beny Steinmetz Group" or "BSG."

According to current Israeli law, such entities should be taxed in Israel if owned or controlled by an Israeli citizen. According to a report aired last night (Tuesday) on Channel 10 television network's investigative program Hamakor (The Source), in the past Steinmetz stated he formed the entities. At the time, that did not require tax payment in Israel.

Once, however the law changed, Steinmetz stated that the company was formed by a Belgian and that he himself has moved his center of life from Israel to Geneva, according to Hamakor.

The question of who controls the foundations and companies is at the heart of the dispute. In recent interviews and media mentions, including the BSG website, Steinmetz insists he is a non-executive adviser to BSG.