VAT on European Cruises

[New_Cruiser_2009]

I tired the search and it didn't pull up much.

 

What is VAT? What percentage is it? Is there any strategy to avoid it?

 

Thanks,

 

Neil

 

 

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[B6ConMe]

I tired the search and it didn't pull up much.

 

What is VAT? What percentage is it? Is there any strategy to avoid it?

 

Thanks,

 

Neil

 

 

Sent from my iPhone using Forums

 

VAT - Value Added Tax

 

Here's a thread that talks about and I always search in Google and get better results.

 

http://boards.cruisecritic.com/showthread.php?t=1911653

[New_Cruiser_2009]

Wow. Not sure if that thread cleared the waters or muddied them further! I'm going to reach out to my TA.

 

 

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[isdoo]

Where are you going?

 

Which ship / which port of embarkation?

[Froggitt]

It depends on the route, and it depends on which VAT rules NCL decide to apply. On a cruise from an EU country to a non EU country (e.g. Spirit BCN to CAS), wait until you've cleared to international waters out of Spain before ordering a VAT free drink, and youll save all of maybe 75 cents.

[New_Cruiser_2009]

Depart Barcelona. Then Naples, Rome, Livorno, Cannes and Palma de Marjoca (spelling?)

 

Thanks for the help guys

 

 

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[Sauer-kraut]

Depart Barcelona. Then Naples, Rome, Livorno, Cannes and Palma de Marjoca (spelling?)

 

Thanks for the help guys

 

 

Sent from my iPhone using Forums

 

Just to muddy the waters a bit more, it had been the norm that all cruises that r/t from Barcelona would be charged the VAT for the entire voyage, and Mallorca is also Spanish so you're not really going out of the 'zone'.

 

Just be prudent when purchasing on board... specialty restaurants, beverages, and shop items.

[isdoo]

Depart Barcelona. Then Naples, Rome, Livorno, Cannes and Palma de Marjoca (spelling?)

 

Thanks for the help guys

 

 

This is the letter that will be in your stateroom.

 

Spain Value Added Tax (VAT) Information

 

Dear Guest,

 

Welcome to Norwegian Epic. This itinerary will travel to countries within the European Union* (EU) only. Therefore, Norwegian Cruise Line and the retailers onboard are required by law to charge a value added tax (VAT) of 21% on most products sold onboard with the exception of bar sales which are taxed at 10%. Additionally, VAT of 10% is required to be added to specialty restaurant cover charges. All VAT charges will be reflected on your onboard receipts.

 

Guests who are residents of a country outside the EU will have an opportunity to reclaim a

portion of taxes paid on merchandise purchased onboard at the last point of EU departure as

long as the reclaim is within 30 days of purchase. VAT reclaims can only be made for

merchandise you will be taking with you exiting the EU, thus VAT paid on bar/restaurant

purchases will not be eligible for reclaim. In order to claim your VAT refund, purchases must

equal 90.16 EUR or more (approximately $120 USD) per retail location. Multiple receipts

from within each retail location may be used in order to attain the 90.16 EUR spending

requirement; however, combining receipts from different retail locations is NOT

allowed (i.e. Gift Shops, Spa Shop and Photo Gallery).

For your convenience and to facilitate the refund process, please note the following:

• Our Gift Shops, Spa Shop and Photo Gallery will issue a Global Blue Tax Refund

Receipt to non-EU passengers for applicable purchases over 90.16 EUR

(approximately $120 USD) at the point of sale.

• Global Blue pamphlets are available from our Gift Shops, Spa Shop and Photo Gallery.

These pamphlets explain the refund procedures and provide a list of Cash Refund

Offices.

The Tax Refund Receipt will allow you to claim back your value added tax paid less any

commission charged by Global Blue. Please note that merchandise, for which you are

claiming a VAT refund, must be presented to Customs Officials at your last point of departure

from the EU. See Frequently Asked Questions (F.A.Q.’s) for more information.

Purchases made ashore also may be eligible for VAT refund; however, you must obtain a

special refund receipt from the store where the purchase was made. At the time you make

a purchase ashore, you should ask merchant for special refund receipt and/or other details

required to claim a VAT refund. Tax Refund Receipts cannot be issued onboard for

purchases made ashore.

* European Union countries include Austria, Belgium, Denmark, Finland, Germany, Greece, Spain, France (including Monaco),

Ireland, Italy, Luxembourg, Netherlands, Portugal, Sweden, United Kingdom, Cyprus, the Czech Republic. Estonia, Hungary,

Latvia, Lithuania, Malta, Poland, the Slovak Republic, Slovenia, Bulgaria, and Romania.

FREQUENTLY ASKED QUESTIONS (F.A.Q.'s)

1.) Q. What is the Spanish VAT (Valued Added Tax)?

A. The Spanish VAT is a government-imposed tax on products and certain services sold

onboard on cruises that originate in a Spanish port, and call only on EU (European Union)

countries.

2.) Q. What is the reason behind this tax?

A. According to VAT directive 2006/112/CE, VAT is applicable to goods and certain

services sold onboard in the course of EU cruises. Each EU country has a different VAT

rate.

3.) Q. What items are subject to the VAT?

A. Products are taxable, from venues such as Gift Shops, Spa Shop & Photo Gallery as

well as bar sales, specialty restaurant cover charges and certain other charges.

4.) Q. What VAT rate is imposed on products and services?

A. Most products sold onboard on sailings originating out of Spanish ports will be subject

to a 21% VAT. For Bar services (including in-room Mini-Bars) and specialty restaurant

charges the percentage will be 10% (non-refundable).

5.) Q. Can the VAT be reclaimed?

A. Yes, if you reside in a non-EU country, and you follow the procedures for a VAT reclaim.

VAT can be reclaimed only on products landed and which meet the specified criteria. VAT

on services and products consumed onboard may not be reclaimed. Please refer to the

Global Blue pamphlets found in the shops.

6.) Q. What is the "Global Blue Tax Refund Receipt"?

A. It is a form the Non-EU guest receives from retail location for purchases over 90.16 EUR

(approx. $120 USD) to claim back the applicable VAT portion of the sale.

7.) Q. What is the minimum amount per transaction the guest must spend in order to

claim back the VAT?

A. The minimum amount is 90.16 EUR (approximately $120 USD) in order for the guest to

be able to reclaim the VAT portion of the sale. Multiple receipts from within each retail

location may be used in order to attain the 90.16 EUR spending requirement;

however, combining receipts from different retail locations is NOT allowed (i.e.

Gift Shops, Spa Shop and Photo Gallery).

8.) Q. Can I claim the VAT refund at the airport?

A. The guest can claim the VAT portion at the airport by:

• Completing personal information on Global Blue (GB) Receipt.

• Showing your purchases, point-of-sale receipts & GB Receipt to Customs at your

last EU departure point and having your GB Receipt stamped.

• Taking your stamped GB Receipt to a Global Blue Office for a credit card refund.

• See Global Blue pamphlets for more ways to collect your refund.

[W5KAP]

2 years ago we did the Ruby TA from Venice. We hit a ton of ports in many countries so we did spend some money. In particular we purchased a very expensive cameo set from Naples. The VAT was pretty hefty. When we docked in the last European port (Madiera) we went to the customs office with filled out paperwork and about 2 months later we saw it credited back to our American Express card. Talk to the desk on the ship. They will help you outy. By the way, you can't avoid it unless you make no purchases at which point the whole thing becomes moot.

 

Enjoy your cruise

 

Cheers, Kenn

[j-9]

For the Barcelona R/T Canary Island itinerary, does the stop in Casablanca mean that VAT will not be charged, once in International waters? And if so, how do you know when you are outside the VAT zone? For example, if I am going to buy a wine package first day, is it as soon as we leave the dock, or is it some distance from shore?

Thanks

[HokiePoq]

For the Barcelona R/T Canary Island itinerary, does the stop in Casablanca mean that VAT will not be charged, once in International waters? And if so, how do you know when you are outside the VAT zone? For example, if I am going to buy a wine package first day, is it as soon as we leave the dock, or is it some distance from shore?

Thanks

 

 

Good question. I do know that the cancellation of the stop in Tunisia made our Jade cruise a closed EU loop which changed things onboard. First cruise ever with no liquor store! Not that I'd have bought any on a European cruise after our back to back on the Epic a few years ago. When we got on in Miami, same cost as the Caribbean (good prices) and on the back to back, costs skyrocketed and liquor content went down. They had to box up the booze the had and couldn't sell it in Europe.

[isdoo]

For the Barcelona R/T Canary Island itinerary, does the stop in Casablanca mean that VAT will not be charged, once in International waters? And if so, how do you know when you are outside the VAT zone? For example, if I am going to buy a wine package first day, is it as soon as we leave the dock, or is it some distance from shore?

Thanks

 

Casablanca is not in the EU, as it is in Morocco, so not VAT is charged outside of Spanish waters, which is 12 miles from the coast.

 

Often thinks like this are charged outside of the Vatable area.

 

Your invoice/receipt must show VAT if charged, in fact the price displayed should include VAT as far as I know. Business to business transactions prices can be shown ex-VAT, but not consumer transactions.

 

Which from experience cruiselines seem to avoid. Are they breaking the law? Not sure.

[SteveH2508]

For the Barcelona R/T Canary Island itinerary, does the stop in Casablanca mean that VAT will not be charged, once in International waters? And if so, how do you know when you are outside the VAT zone? For example, if I am going to buy a wine package first day, is it as soon as we leave the dock, or is it some distance from shore?

Thanks

 

The Canary Islands (though part of Spain) are not in the VAT area so they trigger the VAT-free as well as Casablanca.

[KeithJenner]

Yes, the Canary Islands route doesn't have VAT charged all cruise.

 

I waited until the second morning to purchase the Viva Vino package, as we didn't leave Barcelona until 7pm. I carried on a bottle for the first night.

 

A reasonably good sign as to whether VAT is chargeable is whether the shops/casino is open.

 

We avoided paying VAT on the beer bucket we got when in Malaga by the batman keeping our card and settling up when we left the bar at the end.

 

If I was buying the UBP then I would wait until after sailing before buying it. Even though you may have to pay for your first few drinks, you save about $50 VAT.

[Froggitt]

Your invoice/receipt must show VAT if charged, in fact the price displayed should include VAT as far as I know. Business to business transactions prices can be shown ex-VAT, but not consumer transactions.

 

Which from experience cruiselines seem to avoid. Are they breaking the law? Not sure.

 

UK Law is

VAT is a tax that you pay when you buy goods and services in the European Union (EU), including the UK. If you have to pay VAT on something, it will normally be included in the price you see.

I haven't found any cruise ship exemptions to this. However NCL does not appear to adhere to this law out of the UK e.g. bar menu prices are always shown ex-VAT. I don't know if the law is different in Spain/Italy/France.

[kylenyc]

Something I wrote ages ago...

 

In my layman's mind, VAT it's just the equivalent of a sales tax with the goal of trying to come up with a more fair sales taxation scheme based on "adding value" to a product or service vs a sales tax which can be applied to a product or service at multiple points while it's being produced whether or not any "value" was actually added to the product/service.

 

If you spend X amount of Euros in a SINGLE RETAIL LOCATION, you are entitled to a VAT tax refund. The minimum spending amount varies by country. In Spain, its about €90 Euros or $124 USD. The retail location will provide you a special receipt for your purchase. For example, I lost my camera in Netherlands, and got a receipt for a VAT tax refund for the new camera which I have to mail in less a processing fee.

 

You have a similar restriction on the cruise, the amount must be from a single participating retailer i.e. the duty free shop. You will get letter describing this in detail the cruise (example posted by someone else up above). If my memory serves, you are not entitled to a VAT refund for restaurant and alcohol purchases in any amount.

 

Example - Go to store A in Barcelona and spend €50, and go store B €50. You are not entitled to a VAT refund. Go to a participating Store C and spend €100 at one time, then Store C will give you a special receipt/form for the VAT refund.

 

Rick Steve's VAT Rates in Europe

http://www.ricksteves.com/plan/tips/...tes-europe.htm

Edited April 25, 2014 by kylenyc

[SteveH2508]

Something I wrote ages ago...

 

In my layman's mind, VAT it's just the equivalent of a sales tax with the goal of trying to come up with a more fair sales taxation scheme based on "adding value" to a product or service vs a sales tax which can be applied to a product or service at multiple points while it's being produced whether or not any "value" was actually added to the product/service.

 

If you spend X amount of Euros in a SINGLE RETAIL LOCATION, you are entitled to a VAT tax refund. The minimum spending amount varies by country. In Spain, its about €90 Euros or $124 USD. The retail location will provide you a special receipt for your purchase. For example, I lost my camera in Netherlands, and got a receipt for a VAT tax refund for the new camera which I have to mail in less a processing fee.

 

You have a similar restriction on the cruise, the amount must be from a single participating retailer i.e. the duty free shop. You will get letter describing this in detail the cruise (example posted by someone else up above). If my memory serves, you are not entitled to a VAT refund for restaurant and alcohol purchases in any amount.

 

Example - Go to store A in Barcelona and spend €50, and go store B €50. You are not entitled to a VAT refund. Go to a participating Store C and spend €100 at one time, then Store C will give you a special receipt/form for the VAT refund.

 

Rick Steve's VAT Rates in Europe

http://www.ricksteves.com/plan/tips/...tes-europe.htm

 

My emphasis - another clue that the whole trip is VAT-able is the Duty Free shop is closed.

[mugtech]

So since our cruise leaves from Venice and visits Turkey it sounds like VAT will not be an issue until we get off the ship in Barcelona.

[Froggitt]

It will be for sailaway drinks until say an hour after departure when it moves into international waters.

[KeithJenner]

And it is often applied when in port during the cruise.

 

VAT was charged on the Spirit in Malaga, but not in other ports. Maybe it is because Malaga was also an embarkation port.

Edited April 25, 2014 by KeithJenner

[Froggitt]

And it is often applied when in port during the cruise.

 

VAT was charged on the Spirit in Malaga, but not in other ports. Maybe it is because Malaga was also an embarkation port.

Or maybe because Malaga was the only EU port.

 

Or maybe because NCL have no clue about the VAT rules!!!

[ylojerseygirl]

I understand that anything you purchase prior to boarding (UDP, shows, etc) are not charged the VAT tax and was advised to make my purchases ahead of time to avoid the VAT. This is especially helpful since our cruise on the EPIC, RT from Barcelona does not stop at any EU countries.

[Froggitt]

That's prob because they are sold beforehand by a country (USA) that doesn't levy VAT.

 

I don't know what the equivalent US Sales Tax rules are for pre-cruise purchases, and whether or not it would be levied.....sounds like not.

[KT Cruiser]

So I assume the purchase of cruise excursions are not a part of the VAT, correct?

Edited April 25, 2014 by KT Cruiser

[Froggitt]

Depends where you buy them. I would expect

- before the cruise - NO VAT

- on a cruise that doesn't leave the EU - VAT

- on board leaving an EU country before it leaves country waters bound for a non EU country - VAT

- on board leaving an EU country after it leaves country waters bound for a non EU country - NO VAT

- on board leaving a non EU country bound for an EU country - NO VAT

 

However this is subject to NCL knowing what the rules are and how to apply them!!!