21 % VAT tax on purchases on European cruises

Hi,

If you are planning a European cruise this summer or fall, try to buy shore excursions, wine and drink packages, Internet package, etc before boarding your ship in European ports. We didn't do so and have been hit with an additional 21% VAT tax on onboard purchases. This has changed since last year so check it out before flying to your European cruise. The cruise lines did not make this change obvious in their info although it is there in the fine print.

This 21% is in addition to the 15 or 18 percent tip for services so your bill will be about 35 to 40 percent higher than you expect.

Hope this helps someone as I wish someone would have posted this before I left.

Have a great next cruise.

What port are you sailing from? This has been reported out of Spain for a number of years, but not elsewhere.

What port are you sailing from? This has been reported out of Spain for a number of years, but not elsewhere.

It also depends on whether all of the ports of call are in the EU economic block. Certain ports like Gibraltar are not, and then the VAT is not added.

It also depends on whether all of the ports of call are in the EU economic block. Certain ports like Gibraltar are not, and then the VAT is not added.

OP's cruise appears to be a Barcelona to Venice with no non EU ports.

Due to the cancellation of many (if not most?) Med cruise stops in Turkey this year, there are many more cruises impacted by this VAT tax requirement. Stopping in Turkey was not only popular, it also enabled the cruise line to dispense with the extra VAT.

We are doing a TA from Barcelona with; with stops in other spainish ports, plus Gilbrater, am wondering if we will charges this tax?

We are doing a TA from Barcelona with; with stops in other spainish ports, plus Gilbrater, am wondering if we will charges this tax?

Gibraltar is outside the VAT area so you will not be charged VAT for the whole voyage - only charged whilst in Spanish waters. (A TA goes outside the European Area as well, last time I looked!);)

Our planned cruise next year has only one non-EU state on its itinerary (I think) - Montenegro - but that may change, as Montenegro has been negotiating with the EU for years. I can't imagine paying 21% VAT on top of everything!

Gibraltar is outside the VAT area so you will not be charged VAT for the whole voyage - only charged whilst in Spanish waters. (A TA goes outside the European Area as well, last time I looked!);)

Thanks for clarifying... I vaguely recall reading something on this sometime ago, but did not recall details...

The absence of a non-EU port should have made no difference to the cost of excursions.

VAT (Spanish abbreviation is IVA) has always been payable for goods/services supplied ashore, regardless of the cruise itinerary. It would always have been charged to the cruise line by their on-shore suppliers, & included by the cruise line in the ticket price of the excursion. No different to you buying anything ashore, like a beer or a meal or a souvenir or a private excursion - VAT is always charged (but included in the sticker price) because it's a service provided in Spain, not on the ship.

So because any VAT payable has always been included in the cost of shore excursions in EU countries, there should be no increase.

And even if the absence of a non-EU port did make a difference, the VAT on excursions in Spain is at the reduced rate of 10%, not the standard rate of 21%

In another thread I said that excursions accommodating 10+ passengers are classified as "transport" and VAT is zero-rated.

My mistake. :o

Yes, it's zero-rated in the UK - but charged at the reduced rate of 10% in Spain.

Yes, the sale of alcohol is subject to Spanish standard-rate VAT (21%) if your ship doesn't include a non-EU port, but the rate for soft drinks is 10%.

Worth checking your invoices to see if you have indeed been charged 21% VAT on excursions & soft drinks?

VAT on goods/services on a cruise ship in Europe is a very muddy situation, brought about by different interpretations of EU-wide legislation.

VAT was never charged for ship purchases on any itinerary. I'm not aware of any change in the actual law, but a few years back the Spanish decided that VAT should be payable on EU-only cruises. At one time some cruise lines were charging it, others with similar itineraries were not. And other EU countries weren't charging it at all.:confused:

Now Italy has adopted a similar interpretation & charges VAT on EU-only cruises - not helped by Croatia joining the EU. And I've heard of it happening on round-Britain cruises. But I don't see the same outcry as I've often seen about Spain.

Roll on the Brexit referendum. ;)

To confirm posts by others - if a cruise includes a port outside the EU tax regime, no VAT is payable on ship purchases. Hence the value of including places like Gibraltar, Turkey, Guernsey, Canaries, etc.

Sorry, can't help but make a comparison with the US of A.;)

You have experienced in unusual circumstances in Europe what unwitting first-timers to the USA have experienced as standard practice.

In Europe we're used to any taxes payable being included in the sticker price - that's a legal obligation.

And the 18% tip on ships' drinks is of course down to the US-operated cruise line, not the EU. In Europe most folk tip around 5% to 10%. 18% is unheard-of, & some tip nothing.

So to first-timers to the US it can be a shock to have typically 12% tax added to a check, & to be expected to add typically around 18% tip.

JB :)

The absence of a non-EU port should have made no difference to the cost of excursions.

 

Sorry, can't help but make a comparison with the US of A.;)

You have experienced in unusual circumstances in Europe what unwitting first-timers to the USA have experienced as standard practice.

In Europe we're used to any taxes payable being included in the sticker price - that's a legal obligation.

And the 18% tip on ships' drinks is of course down to the US-operated cruise line, not the EU. In Europe most folk tip around 5% to 10%. 18% is unheard-of, & some tip nothing.

So to first-timers to the US it can be a shock to have typically 12% tax added to a check, & to be expected to add typically around 18% tip.

 

JB :)

Even Americans are often surprised when a drink or service bought while the ship is in coastal waters has the local sales tax added. Have had to explain this to cruisers who see an extra charge added to their sail away cocktail. While I do not like the 18 to 21% taxes, I do like the fact that the price I see is the price I pay. Annoying here are hotel bills with added state sales tax, local sales tax, add on convention center fees, etc. which you do not see in the original booking price and can top 20% in some places.

There's a VAT (or Moms as it's called in Swedish) of 25% on most things in Sweden (there's exceptions). But we never see that, the price on the price tag is what we pay.

What I don't like about the U.S is that you never know what you are going to pay when you buy something since they add the tax on top of the price on the price tag.

There's a VAT (or Moms as it's called in Swedish) of 25% on most things in Sweden (there's exceptions). But we never see that, the price on the price tag is what we pay.

 

What I don't like about the U.S is that you never know what you are going to pay when you buy something since they add the tax on top of the price on the price tag.

Same in Barbados (except it's 17.5%). But I have gotten accustomed to adding on the extra cost in my head when I visit the USA. Before I go I check what the tax rate is in that state so that I know approximately what to add on in my head when I am looking at items to buy and trying to figure out if they are a good deal or not.

Australia also has the tax included in the price tag. As an American, I found it strange that folks would trust the merchant that the correct amount of tax was being charged (and no gouging was going on). If it's all inclusive, you have no way of telling if the correct amount of tax is being charged.

It is true that the US charges tax on top of the price tag, but I find it easy to determine if I add 10% to any price indicated, that way you know the amount of the item and the amount of the tax separately. There are a few States that charge more, but most charge less.

California charges 10% so it's easy here to know the amount of tax being added. Would be a little harder in States that charge 13.5% or 8.5%, but rounding it to 10% would give you an idea of the total cost of something.

Australia also has the tax included in the price tag. As an American, I found it strange that folks would trust the merchant that the correct amount of tax was being charged (and no gouging was going on). If it's all inclusive, you have no way of telling if the correct amount of tax is being charged.

 

It is true that the US charges tax on top of the price tag, but I find it easy to determine if I add 10% to any price indicated, that way you know the amount of the item and the amount of the tax separately. There are a few States that charge more, but most charge less.

 

California charges 10% so it's easy here to know the amount of tax being added. Would be a little harder in States that charge 13.5% or 8.5%, but rounding it to 10% would give you an idea of the total cost of something.

VAT is not an add on like a sales tax. The system works differently. Any merchant could charge you anything they wanted - in the U.S. the price before tax could be anything they wanted to charge you too, right? It's up to you to decide if the item is worth what they are asking for it.

Australia also has the tax included in the price tag. As an American, I found it strange that folks would trust the merchant that the correct amount of tax was being charged (and no gouging was going on). If it's all inclusive, you have no way of telling if the correct amount of tax is being charged.

 

It is true that the US charges tax on top of the price tag, but I find it easy to determine if I add 10% to any price indicated, that way you know the amount of the item and the amount of the tax separately. There are a few States that charge more, but most charge less.

 

California charges 10% so it's easy here to know the amount of tax being added. Would be a little harder in States that charge 13.5% or 8.5%, but rounding it to 10% would give you an idea of the total cost of something.

I don't understand your problem over whether the merchant is applying the correct tax. :confused:

How much of the price is tax, or even whether the correct amount of tax has been applied, is irrelevant - the important thing is knowing the total price without having to ask the tax rate & do the mental arithmetic, cos the total what comes out of your pocket.

Inclusive pricing is simple & transparent.

But I can understand that's more difficult in the US - different tax rates in different states make it difficult for nation-wide merchants to promote tax-included prices.

JB :)

I don't remember being charged a VAT on our last trans-Atlantic cruise (which began in Barcelona). I'm going to have to look through our old documentation and see what we paid. Interesting!

Smooth Sailing ! :) :) :)

I don't remember being charged a VAT on our last trans-Atlantic cruise (which began in Barcelona). I'm going to have to look through our old documentation and see what we paid. Interesting!

 

Smooth Sailing ! :) :) :)

VAT is charged on itineraries which include only EU ports.

I'm not aware of any EU countries on your side of the Atlantic (for the pedantics, Martinique is actually a department of France, but not within the EU tax regime) ;), so you will not have been charged VAT during your cruise. :)

Possibly while within Spanish waters, but not beyond.

JB :)

As an American, I found it strange that folks would trust the merchant that the correct amount of tax was being charged (and no gouging was going on). If it's all inclusive, you have no way of telling if the correct amount of tax is being charged.

The amount of VAT is written on the receipt, it will state the amount without VAT, how much the VAT is and the total price.

Moms is the Swedish word for VAT.

Australia also has the tax included in the price tag. As an American, I found it strange that folks would trust the merchant that the correct amount of tax was being charged (and no gouging was going on). If it's all inclusive, you have no way of telling if the correct amount of tax is being charged.

 

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If the trader was overcharging people for VAT, the VAT inspector should pick it up during their inspection. Anyone doing this would likely be 'up the steps' to the courts and would be on the wrong side of the VAT inspector - both are not nice places to be!

If the trader was overcharging VAT it would make his products more expensive so there is no advantage to him doing it.

The more common VAT fraud would involve overclaiming Input Tax (the tax paid on purchases which a trader can usually reclaim or offset against the Output Tax (VAT collected on sales).

Can you tell that I am currently teaching VAT to my accounts students?:rolleyes:

Australia also has the tax included in the price tag. As an American, I found it strange that folks would trust the merchant that the correct amount of tax was being charged (and no gouging was going on). If it's all inclusive, you have no way of telling if the correct amount of tax is being charged.

 

It is true that the US charges tax on top of the price tag, but I find it easy to determine if I add 10% to any price indicated, that way you know the amount of the item and the amount of the tax separately. There are a few States that charge more, but most charge less.

 

California charges 10% so it's easy here to know the amount of tax being added. Would be a little harder in States that charge 13.5% or 8.5%, but rounding it to 10% would give you an idea of the total cost of something.

I am not sure if I have interpreted your comment correctly? In Australia on the receipt it includes the breakdown of the 10% sales tax similar to the receipt posted for Sweden by Extra Kim. There is no "gouging" possible with "extra" tax added by the sales merchant.

When I was in the U.S. at the beginning of the year, I sometimes did wish I didn't have to do the extra calculation for sales tax prior to deciding what the actual cost and whether to buy something. But that's the joys of travelling, learning to experience new things in other countries.

The base price, VAT and final price are printed on UK invoices and sales slips as well, at least I think so?