Waze founder now offers app to navigate VAT refund process

Israeli entrepreneur Uri Levine, co-founder of the Waze navigation app that was sold to Google in 2103 for over $1 billion, has now turned his sights to the navigation of the often-impenetrable VAT refund process for tourists.

In many countries, a value-added tax, or VAT, is levied upon goods and services but does not apply to items bought and taken out of the country by nonresidents. Tourists pay the tax at the point of purchase and then have to seek a refund as they exit the country.

Together with co-founder Ziv Tirosh, Levine has created an app that he says can make the refund process more efficient, saving claimants delays, stress and a lot of frustration.

“Every person I tell about this has horror stories about the hour-long line at customs, filling out the wrong forms, getting to a closed customs counter, etc.,” Levine said in a statement announcing the app. “As a result, around 90% of VAT refunds, some 23 billion euro, doesn’t reach tourists’ pockets. Our mission is to make sure they get what’s rightfully theirs.”

More than 50 countries allow tourists to get VAT refunds for purchases of products they take when they leave. In Europe, VAT on clothing, electronics and toys ranges between 17% and 27%. The problem is that to get a VAT refund, tourists must go through a laborious process which can include standing in line at the airport, keeping their purchases unpacked and at hand; navigating complex forms that shop owners don’t always have, and, in the end, not always getting their money back because of a lack of a traceable paper trail or because the counter happens to be closed at the time they leave the country.

That is what Refundit, a Tel Aviv-based startup set up in 2017, is looking to change. Refundit is seeking to “revolutionize” an industry that hasn’t changed for decades, the statement said.

The app provides a mobile solution and makes the process digital, so tourists who’ve been on a shopping spree in Europe save time and money. Tax authorities will benefit from the digitization — by approving the refunds online — and also get the benefit of gathering big data to perform advanced analytics, using artificial intelligence capabilities, and integrating fraud prevention into the process. Added to all that, they will be providing visitors with more efficient service, the statement said.

Using the app, tourists scan their invoices and digitally apply for the refund. Tax authorities will then send a digital approval. Only under special circumstances will the tourist be asked to go through the customs counter at the airport, the statement said.

Tourists will receive the full amount due, minus Refundit’s commission.

“Our commission will be by far the lowest in the industry,” said Tirosh in an email interview. It is planned to be around 9%-10%, whereas today commissions range around 25%-65%, he said.

Refundit is preparing to launch a joint pilot of the service in several European countries, the statement said, starting with Slovakia — which was also the first country where Waze succeeded, Levine said in a press conference on Monday alongside Slovakia’s Prime Minister Peter Pellegrini and Finance Minister, Peter Kazimir.

​”Governments understand that the present cumbersome scheme is not sustainable and that the process needs to be digitized,” said Tirosh in the interview. “They also see value for themselves in the digitization, such as the ability to better control the process, use big data for better fraud control and in attracting tourists and increasing their spending on their visit.”

But it is true, he said, that governments will “need to be open to innovation” to adopt the solution, as it represents “quite a revolution” compared to how things are done today.

The company is talking to approximately 10 EU countries, he said, and is focused on Europe for now, which is the biggest market for VAT refunds.

“The innovation we bring is a completely digitized VAT refund service,” said Tirosh. “There is no longer a need to complete forms at the store or stand in line at the airport. Once submitted, the request is traceable through the app. The Refundit solution will allow the tourist to get a refund no matter which store they buy from. Our solution will benefit everyone, the tourist, the retailer and the host country by making shopping even more appealing.”

Tirosh was also the co-founder of Stockton, a developer of innovative bio pesticides for agriculture, in which Hebang Bio of China acquired a 51% stake for $90 million.