The Spanish startup, Woonivers, has announced that it is temporarily suspending its activity in Spain, due to the difficulties of the current regulatory frameworkwhich hinders the entry of new playersdepending on the company.
Specifically, the main reason that has led Woonivers to make this decision iss the absence in our country of a regulatory framework that allows a digital tourism VAT refund system in its entirety, to provide small and medium-sized businesses with an incentive to consume, while improving the tourist shopping experience.
Abel Navajas, Co-Founder & CEO of Woonivers, explained in a statement that “During the years that we have been operating in Spain, we have encountered innumerable obstacles that have made it difficult for us to digitize the business of a lifetime and make it difficult for new competitors to enter. From Woonivers we ask the regulatory bodies to take the example of other countries and empower the consumer through digitization and transparency”.
Woonivers has been operating for three years in Spain with the model imposed by the current tax regulations and trying to promote a change towards a model in which the protagonist is the tourist himself. Despite having known how to position themselves well in Spain, the institutional resistance to generating a competitive and innovative environment in this sector through a regulatory change leads them to abandon the Spanish market.
Spanish businesses lose millions due to the current tourist VAT refund system
According to a study carried out by CEBR for Refundit, the current tourist VAT refund system in Spain means that businesses are losing between 1,200 and 2,500 million euros a year. The difficulty and complexity of the process, which entails a great bureaucratic burden for small businesses, are the main reasons. The study highlights the importance of a change in the regulation of tourist VAT refund as a method to boost retail trade and thus accelerate the country’s economic recovery.
The current system, established more than 30 years ago, is too complex for the vast majority of companies and is only used by department stores and luxury stores, leaving aside small and medium commerce, which has repercussions, among other factors, on economic recovery. Some companies specializing in tourist VAT refunds, such as Refundit or Woonivers, are advocating, with the support of partners such as the CEOE and Adigital, for a change in the regulations. In this way, any authorized associated entity chosen by the traveler can issue an electronic reimbursement document without the need for a prior affiliation contract, thus allowing any business to benefit from tax-free purchases for tourists.
Also, according to a study by SigmaDos, among businesses that offer tax-free purchases, the average spending per foreign customer amounts to 355.9 euros, compared to 151.3 euros in stores that do not offer this possibility (+135%). This study also shows that in Spain more than 80% of businesses, around 750,000, do not offer VAT refunds, of which the majority are SMEs and regional businesses.
“The tourism sector is one of the most relevant industries for the Spanish GDP. With the sights set on economic recovery, it is essential that public administrations adopt measures that encourage this sector as a lever for the recovery of the economy, especially through digitization and the inclusion of SMEs in processes such as the return of Tourist VAT”says Ziv Tirosh, co-founder and CEO of Refundit.
