VAT tax on European Sailings.

[YORKI1]

2 minutes ago, hawkeyetlse said:

How do you know that? It was originally posted yesterday in another thread by someone called Binky0 and they didn’t say when they sailed. 

I looked at Binky0 earlier posts on Cruise Critic.

[room with a view]

9 minutes ago, DCGuy64 said:

It's not listed separately. When we see cruises on the NCL website in the USA, we see just the amount of the cabin shown with the FAS already included. When it comes to pricing out the cruise, there will be separate gratuity charges for the specialty dining restaurants and the unlimited beverage package. For example, we have an upcoming 10-day NCL cruise in the Mediterranean, the beverage package gratuities are $218 per person for 10 days ($21.80 per day) and the specialty dining gratuities are $17.80 per person, so that's $8.90 for each of the two restaurants included as part of FAS. If you don't want the FAS package, you select a slightly cheaper cabin or, in the case of the dining package an beverage, you deselect those while booking the cruise. It sounds like in the UK, FAS is a standalone add-on.

Yes, it's an add on ...for example our 12 day cruise has a basic price  plus government taxes /port charges (the usual) then Free at Sea £498 (632 US Dollars) then service charge £372 .

We were led to believe that the £498 included VAT as had been on previous NCL cruises .

 

It would be a major operation to find if MSC/RCL etc have this charge .

[Odin's Raven]

4 minutes ago, room with a view said:

Yes, it's an add on ...for example our 12 day cruise has a basic price  plus government taxes /port charges (the usual) then Free at Sea £498 (632 US Dollars) then service charge £372 .

We were led to believe that the £498 included VAT as had been on previous NCL cruises .

 

It would be a major operation to find if MSC/RCL etc have this charge .

That’s exactly how I see it vat included . I feel we are having to pay vat twice.

[Odin's Raven]

We travelled out of Barcelona last year with MSC and there was no VAT added on drinks whilst on the cruise .We presumed it was included in the pre booked Drinks Package. So this situation is very confusing.

[Odin's Raven]

Another point that someone may be able to clarify for me is. If you have a drinks package up to the value of €15 a drink and you purchase a drink for €10 (say a beer ) surely when they add on the VAT to that drink it will come in well under the €15 limit so why would you have to pay the VAT as an extra ?

[DCGuy64]

17 hours ago, Odin's Raven said:

Another point that someone may be able to clarify for me is. If you have a drinks package up to the value of €15 a drink and you purchase a drink for €10 (say a beer ) surely when they add on the VAT to that drink it will come in well under the €15 limit so why would you have to pay the VAT as an extra ?

Because the VAT is a tax, that's why. As I said earlier, having the drinks package only pays for the drink itself, not any applicable taxes. The amount is irrelevant. You've paid for the drink itself (including gratuity), but if the relevant tax authority levies a local tax, you have to pay that out of pocket. NCL isn't going to reach into its big pot of cash that you funded by purchasing the package and pay HM government for the tax being demanded. It doesn't work that way, it's not like you've actually handed over the equivalent of €15 a day to NCL that they can then take from. Instead, it's more like you handed over a certain amount of money that entitles you to "free" drinks up to the 15 Euro limit. I get what you're saying but you're looking at it from a set of false assumptions.

[chengkp75]

21 hours ago, Asawi said:

2. This seems to not be in ports only, but in Spanish waters. "Spanish waters" (or possiblu EU waters)  seems to be most of the cruise in some cases while in US you get into international waters pretty soon after takeoff from for example Seattle. (At least that's how I understand it).

The difference is that in the US, sales tax is a state or local law, and the states only have jurisdiction out to 3 nautical miles from shore.  If it was a US national tax, it would be applicable out to the edge of the EEZ (Exclusive Economic Zone), or 200 miles from shore.  In the EU, each "state" is a sovereign nation, and therefore their taxes extend to the EEZ limit.

 

Further, it has been discussed many times in the past, that while each EU nation can charge VAT for purchases within their waters, Spain has decided that if the cruise does not visit any non-EU nation, then Spain can charge VAT on purchases for the entire voyage, regardless of whose waters the ship is in at the time of the purchase.  Not being an expert on EU taxation, I don't know if this is an unusual interpretation of the EU law on Spain's part, whether they are simply overstepping their jurisdiction, or whether this is correct under the EU law.

[Odin's Raven]

3 hours ago, DCGuy64 said:

Because the VAT is a tax, that's why. As I said earlier, having the drinks package only pays for the drink itself, not any applicable taxes. The amount is irrelevant. You've paid for the drink itself (including gratuity), but if the relevant tax authority levies a local tax, you have to pay that out of pocket. NCL isn't going to reach into its big pot of cash that you funded by purchasing the package and pay HM government for the tax being demanded. It doesn't work that way, it's not like you've actually handed over the equivalent of €15 a day to NCL that they can then take from. Instead, it's more like you handed over a certain amount of money that entitles you to "free" drinks up to the 15 Euro limit. I get what you're saying but you're looking at it from a set of false assumptions.

I also get what you’re saying but also feel it’s not a set of false assumptions. I paid for our  cruise in British Pounds including all extras we added on including the FAS package .In Britain everything is taxed so the fact I paid for my cruise in British Pounds in Britain gives me the feeling I have already paid tax on my extras. I noticed you can ask for a claim form to reclaim the tax if you think you should not be paying as it looks like British customers are paying twice. Has anyone filled in these forms and had the tax refunded? Apart from that NCL need a rebranding of the Free at Sea package as it’s clearly not true. 

[DCGuy64]

32 minutes ago, Odin's Raven said:

I noticed you can ask for a claim form to reclaim the tax if you think you should not be paying as it looks like British customers are paying twice.

I've read the same thing, and I think you're correct.

[lgdesign]

On 8/14/2023 at 10:28 AM, room with a view said:

Found this from someone positing on CC.

 

 

Dear
 
We understand your concern in regards to the taxes that have been charged during the cruise and appreciate you did not expect to pay an extra amount on the drinks you ordered. Unfortunately we were not made aware of that issue during the cruise and only learned of it when the first guests contacted us after the end of the voyage.
 
We have now received feedback from our head Office as well as from the colleagues on-board confirming the mistake. This sailing has been considered an intra EU sailing starting and ending within the EU and only touching EU ports of call. For such sailings the respective national VAT is applicable, but only for purchase sales - so e.g. if guests for example didn’t have a drinks package either pre-paid or complimentary and pay per drink, then these costs were subject to Spanish VAT for the whole duration of the cruise. By mistake also guests with included drinks packages were charged with the Spanish VAT, which shouldn’t have happened. We realized that indeed there has been misleading and incorrect communication on-board and you can be assured that different steps were taken in the meantime to avoid similar issues on future sailings. We already received feedback that a proper debriefing of the situation has been conducted. We fully appreciate the frustration this situation during the cruise caused and we sincerely apologize for this highly negative Impression.
 
I have reviewed your final invoice and found that you have been incorrectly charged for an amount of 142,30 USD. In order to refund you, would you please provide us with your bank account number and sort code? A refund back to the credit card is not possible.
 
Kind regards,
 
Mariano Calzada
Guest Relations Executive

 

 

I'll be on a cruise in Nov that goes from Rome to Lisbon (both EU ports with a lot of other EU ports in between) BUT it also stops at Gibraltar (non-EU British territory).  I would assume the stop at Gibraltar would make this cruise a NON-intra EU sailing.

 

How would this impact the Spanish VAT implementation on this cruise?

 

 

Edited August 15, 2023 by lgdesign

[cruiseny4life]

3 hours ago, chengkp75 said:

The difference is that in the US, sales tax is a state or local law, and the states only have jurisdiction out to 3 nautical miles from shore.  If it was a US national tax, it would be applicable out to the edge of the EEZ (Exclusive Economic Zone), or 200 miles from shore.  In the EU, each "state" is a sovereign nation, and therefore their taxes extend to the EEZ limit.

 

Further, it has been discussed many times in the past, that while each EU nation can charge VAT for purchases within their waters, Spain has decided that if the cruise does not visit any non-EU nation, then Spain can charge VAT on purchases for the entire voyage, regardless of whose waters the ship is in at the time of the purchase.  Not being an expert on EU taxation, I don't know if this is an unusual interpretation of the EU law on Spain's part, whether they are simply overstepping their jurisdiction, or whether this is correct under the EU law.

Thank you, chief. This is what I recall from previous conversations. So glad we're heading to NY! I guess that precludes Spain from taxing us while in international, non-EEZ waters. I hope! 

[di T]

But why is it only NCL charging these taxes? Travelled on a b2b with NCL in Feb/ March we were charged Spanish tax while in Spanish water.Traveled in June on Oceania round trip from Barcelona no extra charge! Will be doing b2b from Barcelona in two weeks with Celebrity in the past we have never been charged.NCLbooked in the Med from Barcelona to Italy in November and looks like we might be charged for the full voyage on all drinks etc.So free at sea is not what we thought we were being sold in the UK

[hawkeyetlse]

8 minutes ago, di T said:

NCLbooked in the Med from Barcelona to Italy in November and looks like we might be charged for the full voyage on all drinks etc.So free at sea is not what we thought we were being sold in the UK

Since your cruises doesn't begin and end in Spain, you won't be charged Spanish VAT from start to finish. But (unless they change things between now and November) you should expect to be charged 10% tax on drinks when in Spanish ports or anywhere near the Spanish coast. If you want, you can try to contest this on board or submit a complaint after you get home.

[di T]

1 minute ago, hawkeyetlse said:

Since your cruises doesn't begin and end in Spain, you won't be charged Spanish VAT from start to finish. But (unless they change things between now and November) you should expect to be charged 10% tax on drinks when in Spanish ports or anywhere near the Spanish coast. If you want, you can try to contest this on board or submit a complaint after you get home.

If that is the case and the Spanish Vat is only charged in Spanish waters, it would be like my cruises earlier in the year.But I did read that someone had been charged for the full trip.Maybe their cruise ended in Barcelona as well as it being the port the cruise sailed from.Bit confusing but NCLhave been doing this for a while.At least this time they have sent emails to warn folk.

[Asawi]

4 minutes ago, di T said:

But I did read that someone had been charged for the full trip.Maybe their cruise ended in Barcelona as well as it being the port the cruise sailed from

You are correct. People have been charged the whole cruise. They embarked in Barcelone but disembarked in Italy (Rome?). 

[di T]

54 minutes ago, Asawi said:

You are correct. People have been charged the whole cruise. They embarked in Barcelone but disembarked in Italy (Rome?). 

Wow that’s not good! I was going to book a b2b next year again for the med out of Barcelona 19 nts don’t like the idea of paying extra tax for two of us over the two sailings, might just stick with Celebrity or Royal 

[hoops71]

Do you think it would be any different if I only use my Casinos at Sea free drink card while in their Spanish waters?  Never had to think which drink plan I was using in the past, but might now.  Just trying to think of work arounds or loopholes.  We will be on the Viva Rome to Lisbon starting 9/23, but 5 of the 8 stops are in Spanish ports.

[room with a view]

So ....how is this calculated ? ...is it paid to the Spanish government per ship , per month, per year ?

 

How is it paid  and to whom in Spain ..?

 

A large ship like the Epic with xxxx passengers paying xxxx tax per drink ? ...nice amount of revenue !!

 

In or out of Spanish waters ..does Portugal count ..or is it "just" Spain ?

 

NCL customer "services " will not give answers ....maybe our American cruisers can get some answers.

[schmoopie17]

So...if taxes are paid on cruises beginning and ending in Spain, how does it impact this one?

 

We're on a cruise next year beginning and ending in Rome. However, on this same cruise, there are people who will be both embarking and disembarking in Barcelona. Under the above scenario, those passengers would be taxed the entire cruise, but we wouldn't? How will they know which passengers should be taxed? 

[DCGuy64]

17 hours ago, di T said:

But why is it only NCL charging these taxes? Travelled on a b2b with NCL in Feb/ March we were charged Spanish tax while in Spanish water.Traveled in June on Oceania round trip from Barcelona no extra charge! Will be doing b2b from Barcelona in two weeks with Celebrity in the past we have never been charged.NCLbooked in the Med from Barcelona to Italy in November and looks like we might be charged for the full voyage on all drinks etc.So free at sea is not what we thought we were being sold in the UK

Hard to say why NCL is charging that tax and, according to you, Oceania didn't. It's possible Oceania already builds the cost of the VAT into its price. But part of me is struggling to understand how someone who can afford Oceania is complaining about a measly VAT in the first place. 😄 O is not cheap and their drinks 'package' ain't that great (or cheap). I guess if I were worried about a few extra dollars for my drinks, maybe I can't afford the cruise in the first place. But that's just me.

[di T]

35 minutes ago, DCGuy64 said:

Hard to say why NCL is charging that tax and, according to you, Oceania didn't. It's possible Oceania already builds the cost of the VAT into its price. But part of me is struggling to understand how someone who can afford Oceania is complaining about a measly VAT in the first place. 😄 O is not cheap and their drinks 'package' ain't that great (or cheap). I guess if I were worried about a few extra dollars for my drinks, maybe I can't afford the cruise in the first place. But that's just me.

Maybe it’s a British thing,but I can afford to cruise often and do so with a number of lines,When I pay in advance for something which I try to do each cruise tips,drinks.etc.I do so so I don’t have extra charges I  don’t usually haveOBC.So on a long cruise or b2b for two of us the extra few dollars mount up!NCL in my opinion should just cover this vat in the same way as all the other lines I have traveled on do.Will be very surprised if Celebrity in two weeks charge this vat.This will again be leaving Barcelona as was Oceania.

 

 

 

[DCGuy64]

At the end of the day, for me it's all about the price I ultimately pay. Celebrity and Oceania have always charged more for cruises than NCL, so if there's an additional fee on NCL I hadn't anticipated, especially one that's a one-off due to a decision by a local government, I'm still better off financially than if I'd booked with a rival line. (That doesn't mean, BTW, that Celebrity and Oceania are always more expensive for any cruise, but we base our cruising decisions chiefly on when we can take off work and the itinerary). Companies like Viking have 'free' excursions, but they cost a lot more than NCL to start with, so I have to wonder if companies that don't pass on this Spanish VAT like NCL is doing, have already accounted for that in their (higher) prices. But I could be wrong.

[di T]

3 minutes ago, DCGuy64 said:

At the end of the day, for me it's all about the price I ultimately pay. Celebrity and Oceania have always charged more for cruises than NCL, so if there's an additional fee on NCL I hadn't anticipated, especially one that's a one-off due to a decision by a local government, I'm still better off financially than if I'd booked with a rival line. (That doesn't mean, BTW, that Celebrity and Oceania are always more expensive for any cruise, but we base our cruising decisions chiefly on when we can take off work and the itinerary). Companies like Viking have 'free' excursions, but they cost a lot more than NCL to start with, so I have to wonder if companies that don't pass on this Spanish VAT like NCL is doing, have already accounted for that in their (higher) prices. But I could be wrong.

For us it’s about the value for money! Up to now we have had the pleasure of ove 50 cruises and have enjoyed ourselves on all,I used to book most with Celebrity and still do enjoy sailing with them but NCL have been good price wise and we have been booking them quite regularly.We prefer to sail in the Mediterranean with short flights and add a few nights at the start and end of the cruise.Long haul flights we have done in the past.But now we are retired and cruising just the two of us.Life is good to be able to travel, BonVoyage,Dianne

[cybergremlin]

2 hours ago, schmoopie17 said:

So...if taxes are paid on cruises beginning and ending in Spain, how does it impact this one?

 

We're on a cruise next year beginning and ending in Rome. However, on this same cruise, there are people who will be both embarking and disembarking in Barcelona. Under the above scenario, those passengers would be taxed the entire cruise, but we wouldn't? How will they know which passengers should be taxed? 

I was recently on the epic out of Barcelona which also had people starting/ending in Rome, I spoke to some of these people who said they was also being charged. 
 

As others have said it could be the NCL system can’t distinguish who joined where but this seems unrealistic  

[sfxthx]

On 8/14/2023 at 8:59 PM, eileeshb said:

No it is not. Only the US adds a sales tax at the till, in Europe the sales tax is built into the original price. We pay for the free at sea and that price is supposed to include VAT, that is why the European guests are particularly peeved at the VAT getting charged on something they’ve already paid tax on in Europe. 
we suck it up in the USA because we know the USA is stupid about pricing stuff ex-vat but by rights we could argue the case on that too given advertising requirements here when we purchased through a European website. 
 

I know NCL have a line in their t&cs that lets them inflict additional VAT but how many people do you know that actually read the terms & conditions. 

I am from Germany and my opinion is the same as yours. We are booked on a Med cruise with Norwegian Dawn in November (doesn't include NON-EU-Ports) and Norwegian told me yesterday (after final payment) that we have to pay Spanish VAT on every single drink and for every meal covered by free at sea package for the whole cruise. I always thought if I book my cruise and my free at sea package in advance with their German website, the tax is included in the final price.

It's not the few dollars I now have to pay extra, it's the way NCL communicates this. No word about that, before booking this cruise. Why don't you take a few dollars more for the cruise and include the VAT as every other cruise line does? I am a very loyal costumer and cruised a lot with NCL in the past (and I will do in the future), but this really frustrates me and I don't think this is the right way to treat loyal costumers.

Just my two cents...