Israelis Forgo Refunds: One Billion Shekels Left Abroad

New data from the company PassportCard reveals a significant change in the financial behavior of Israeli travelers, with Greece, Italy, and Hungary leading in demand for tax refunds. On the other hand, despite the sharp increase, most travelers still forgo the money they are entitled to.

The summer vacation travel season is in full swing, and Israelis flying abroad are beginning to change their consumption habits and financial awareness. New data published today (Tuesday) by the travel and relocation insurance company PassportCard points to an impressive jump: a 100% increase in the rate of Israelis who registered for the VAT refund service abroad during the last month alone.

In the past, VAT refunds on purchases abroad were perceived as a cumbersome, bureaucratic process that required standing in nerve-wracking lines at airports. Now, thanks to digital solutions that allow for receiving the refund through a fast, digital, and paperless process, more and more Israelis are choosing to exercise their right.

However, alongside the positive trend, the company clarifies that these are still low numbers relative to the million Israelis expected to travel abroad during the summer. As a result, Israeli travelers continue to leave over a billion shekels a year abroad from their shopping budget — VAT refund money they were entitled to receive but did not claim.

The PassportCard index shows the distribution of the leading destinations where the peak demand for the refund service was recorded. Greece stands at the top of the list in first place. Then Italy, Hungary, France, and Poland round out the top five destinations. In these countries, the VAT rate is considered particularly high and ranges between 20% and 27%.

Itzik Abuksis, CEO of PassportCard Financial Services, commented on the data:

"The awareness of Israelis regarding their right to receive back the VAT they paid abroad has increased significantly in recent months, and it is pleasing to see that more and more travelers are choosing to receive the money they are owed."

He adds:

"At the same time, the data clearly shows that there is still room for many more expenses for which travelers did not claim a refund. We continue to work to make the process accessible and ensure that every shekel owed to Israeli travelers actually reaches them."