Got UBP as a perk/promo - Will I be charged 18% on each drink?

[LMaxwell]

It was reported in another thread that I can't find now, that those with UBP given as a promo are being charged 18% on each drink. Is that right? That doesn't sound correct to me but with all the changes it's hard to keep track of.

 

I know that when you purchase UBP you are charged 18% of the package price as gratuity, and it is not on each individual drink. I was told when I selected UBP as my perk that the gratuities were included and I'd be given $0 receipts where I can add more if I want.

[triptolemus]

No, no, no...

 

In that thread, the poster confused the tax which was charged (Texas) with UBP 18%.

 

After reviewing their folio, they realized that there were no 18% UBP charges, but instead were Texas taxes.

 

http://boards.cruisecritic.com/showthread.php?p=46169239#post46169239

Edited April 6, 2015 by triptolemus

[Beaver1975]

You are not actually charged the 18%. It is a bookkeeping thing to credit the server/bartender for their activity.

[Guindalf]

You are correct. The bill will be zeroed and no gratuity is due unless you wish to add extra.

 

The only cost you may incur is tax if you buy drinks in a port that demands it (NoLo, Spain or other parts of the EU, etc.).

[LMaxwell]

Thanks for the concise answers and to Triptolemus for the link.

[Cruisin&Relaxin]

Thanks for the concise answers and to Triptolemus for the link.

 

Interesting case study in how these false rumors can potentially spiral out of control here on cruise critic forums.

 

Good job to all in curtailing this one with accurate and factual information.

[lachelli]

Okay I am starting to get confused with all of the different posts on this subject re people now saying if you have the udp package included you don't pay any gratuity but if you sail out of Barcelona you will have to pay Spanish sales tax on every single drink you order

 

Thanks

[triptolemus]

Okay I am starting to get confused with all of the different posts on this subject re people now saying if you have the udp package included you don't pay any gratuity but if you sail out of Barcelona you will have to pay Spanish sales tax on every single drink you order

 

Thanks

 

Why are you confused? A gratuity is a gratuity. The VAT tax is the VAT tax. Two distinct things. Separate them in your mind. One has nothing to do with the other.

 

http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/index_en.htm

[wichitastatecruiser]

Okay I am starting to get confused with all of the different posts on this subject re people now saying if you have the udp package included you don't pay any gratuity but if you sail out of Barcelona you will have to pay Spanish sales tax on every single drink you order

 

Thanks

 

You only have to pay the taxes while you are in Spanish waters. Once you are out of Spanish waters the taxes go away.

[lachelli]

You only have to pay the taxes while you are in Spanish waters. Once you are out of Spanish waters the taxes go away.

 

Thank you, i guess where NCL fail is that the dont bring it immediately to yiur attention that you are responsible for sales tax / vat if it's applicable to the drink you order because the UBP does not include that in its cost

 

I guess then in some cases there truly is no such thing as a free drink

[triptolemus]

Thank you, i guess where NCL fail is that the dont bring it immediately to yiur attention that you are responsible for sales tax / vat if it's applicable to the drink you order because the UBP does not include that in its cost

 

Actually, they make it pretty clear in the T&Cs. I know, nobody reads them. Usually the fail is on the passenger for not educating themselves.

 

Norwegian's Ultimate Beverage Package includes a variety of spirits, cocktails, wines by the glass and bottled or draft beer up to and including $11 and unlimited fountain soda and juices at all bars, lounges, restaurants and the Great Stirrup Cay. A 20% discount will be applied to all bottles of wine purchased on board.

 

The Ultimate Beverage Package does not include room service, package sales, ship specific promotions or beer buckets, designated Super Premium brands (subject to change), bottled wine, mini bar purchases, bottled water, fresh squeezed juices, select Lavazza coffee beverages, energy drinks, vending machines, wine stations or spirits, cocktails, draft or bottled beer and glasses of wine over $11. One (1) beverage per person per transaction. Package can be used in all restaurants, lounges, bars and Great Stirrup Cay.

 

A 18% gratuity will be added to all package purchases; your check may reflect applicable VAT for certain ports or itineraries. Packages must be purchased by all qualifying individuals residing in the stateroom or additional staterooms under the same method of payment for the entire length of the cruise. Packages may not be shared and are non-transferable and non-refundable. You must be at least 21 years of age to purchase any alcoholic package and to consume alcohol. See the terms of our guest alcohol policy. Other terms and conditions may apply. This package is not available for purchase on charters, sailings that are two (2) days or less and Pride of America. Guests purchasing this package on board during the dates of March 1st through April 15th will only be able to purchase on embarkation day.

Edited April 6, 2015 by triptolemus

[Always Cruising]

What other European ports charge VAT while docked?

[wichitastatecruiser]

Thank you, i guess where NCL fail is that the dont bring it immediately to yiur attention that you are responsible for sales tax / vat if it's applicable to the drink you order because the UBP does not include that in its cost

 

I guess then in some cases there truly is no such thing as a free drink

 

It's not that big of a deal. My first cruise out of FLL on Carnival I ordered my first drink while docked and was charged a sales tax of 3-6 cents. I think I may have ordered a second one while in FL waters. so I spent a total of 12 cents even though I was on the Cheers program. Since then as far as I know the sales tax does not apply on ship since I don't remember paying sales tax on sail away drinks on Oasis or Getaway, but I also pre-bought those packages also. Anyhow if you don't want to pay the minuscule vat just wait to be far enough from the port to order that drink!

[insanemagnet]

You only have to pay the taxes while you are in Spanish waters. Once you are out of Spanish waters the taxes go away.

 

Not strictly correct. If you board in Barcelona for an EU to EU cruise, then VAT is payable on drinks for the entire cruise.

 

Thank you, i guess where NCL fail is that the dont bring it immediately to yiur attention that you are responsible for sales tax / vat if it's applicable to the drink you order because the UBP does not include that in its cost

 

This is not correct. VAT is charged on the consideration (the amount paid). So if you paid for the UBP, then VAT is due on the $54 or whatever you paid, not some theoretical drink price that you didn't pay.

 

I guess then in some cases there truly is no such thing as a free drink

 

Again not correct, as if you received the UBP as a promo and didn't pay extra for it, then there is no VAT due as there was no consideration (10% of $0 is $0).

 

Actually, they make it pretty clear in the T&Cs. I know, nobody reads them. Usually the fail is on the passenger for not educating themselves.

 

Consider the circumstance of four people at the bar, all ordering the same $10 drink -

 

- One has to pay $1 VAT (10% of $10) because they boarded in Barcelona and they are charging the drink to their cabin bill

 

- One does not have to pay VAT, because they boarded at Rome, and the ship is outside Spanish and Italian waters, and Italian VAT rules are different to Spanish VAT rules

 

- One pays nothing, because although they boarded in Barcelona they have already paid for the UBP and should have been charged $5.40 VAT when they paid for their $54 UBP

 

- And the other doesn't pay it because they although they boarded in Barcelona they got the UBP free as a promo

[wichitastatecruiser]

Not strictly correct. If you board in Barcelona for an EU to EU cruise, then VAT is payable on drinks for the entire cruise.

 

The VAT is only payable in EU waters. VAT is not charged in International waters. By definition International waters is anything 12 miles off shore. The VAT tax would not apply to drinks ordered while the ship was 12 miles or more away from a port.

[insanemagnet]

The VAT is only payable in EU waters. VAT is not charged in International waters. By definition International waters is anything 12 miles off shore. The VAT tax would not apply to drinks ordered while the ship was 12 miles or more away from a port.

 

Sorry, but you are wrong.

 

For a cruise leaving from an EU port and not stopping at any non-EU ports, then the place of supply of goods consumed on board can be treated as the place of departure, if the EU member state has implemented that rule.

Articles 37 and 57 of the Principal VAT Directive, if you are interested.

 

Spain has, so anyone boarding in Barcelona for a Barcelona to Barcelona cruise, not stopping at any non-EU countries (e.g. the Epic Western Med itinerary), the place of supply of drinks is Spain, irrespective of where the ship actually is.

[Guindalf]

Not strictly correct. If you board in Barcelona for an EU to EU cruise, then VAT is payable on drinks for the entire cruise.

 

 

 

This is not correct. VAT is charged on the consideration (the amount paid). So if you paid for the UBP, then VAT is due on the $54 or whatever you paid, not some theoretical drink price that you didn't pay.

 

 

 

Again not correct, as if you received the UBP as a promo and didn't pay extra for it, then there is no VAT due as there was no consideration (10% of $0 is $0).

 

 

 

Consider the circumstance of four people at the bar, all ordering the same $10 drink -

 

- One has to pay $1 VAT (10% of $10) because they boarded in Barcelona and they are charging the drink to their cabin bill

 

- One does not have to pay VAT, because they boarded at Rome, and the ship is outside Spanish and Italian waters, and Italian VAT rules are different to Spanish VAT rules

 

- One pays nothing, because although they boarded in Barcelona they have already paid for the UBP and should have been charged $5.40 VAT when they paid for their $54 UBP

 

- And the other doesn't pay it because they although they boarded in Barcelona they got the UBP free as a promo

 

Your turn to be wrong.

 

If you got the UBP as a free promotion, VAT (and/or State tax in certain areas) is due on the COST OF THE DRINK, not the cost of the package, so yes, you WILL get a 10% VAT charge added to your onboard account if it is due per drink.

 

We cruised in a suite in January on the Dawn out of New Orleans, so we had the UBP, UBP and OBC. While we were in port or sailing down the Mississippi (LA state waters), state tax was added on a per drink basis. The total for our 7-night cruise came to under $5, but the charges were definitely there.

 

This is fact, and not speculation from people who think they know the way it works.

 

You are right, however, in that VAT will be charged on every drink on an EU closed-loop cruise no matter how far from shore the ship goes.

[insanemagnet]

Your turn to be wrong.

 

If you got the UBP as a free promotion, VAT (and/or State tax in certain areas) is due on the COST OF THE DRINK, not the cost of the package, so yes, you WILL get a 10% VAT charge added to your onboard account if it is due per drink.

 

We cruised in a suite in January on the Dawn out of New Orleans, so we had the UBP, UBP and OBC. While we were in port or sailing down the Mississippi (LA state waters), state tax was added on a per drink basis. The total for our 7-night cruise came to under $5, but the charges were definitely there.

 

This is fact, and not speculation from people who think they know the way it works.

 

Sorry again, but I am not wrong.

 

You have described what is charged for American taxes, which I will fully admit have no idea about.

 

What I do know amount is the EU consumption tax aka VAT. Take a read of Article 73 of the principal VAT directive -

 

"In respect of the supply of goods or services, other than as referred to in Articles 74 to 77, the taxable amount shall include everything which constitutes consideration obtained or to be obtained by the supplier, in return for the supply, from the customer or a third party, including subsidies directly linked to the price of the supply."

 

http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:32006L0112&from=EN

 

 

Now where the UBP has been provided as a promo, there is no consideration, therefore there is no taxable amount. Without a taxable amount, then there is no tax. And before anyone suggests that the cruise ticket price forms part of the consideration, I suggest reading the many cases on single and multiple supply.

 

I fully accept that American sales taxes may work in a different way, and the tax is due on a theoretical price that wasn't paid, but VAT does not.

 

You are right, however, in that VAT will be charged on every drink on an EU closed-loop cruise no matter how far from shore the ship goes.

 

I am glad we are in agreement.

Edited April 6, 2015 by insanemagnet

[Guindalf]

...and you have personal experience of this, do you?

 

No, thought not.

[insanemagnet]

...and you have personal experience of this, do you?

 

No, thought not.

 

Yes I do, but I will discover how NCL implement it in May.

 

Let us hope that they correctly understand VAT law, but your implication seems to be that they do not.

Edited April 6, 2015 by insanemagnet

[Guindalf]

Yes I do, but I will discover how NCL implement it in May.

 

Let us hope that they correctly understand VAT law, but your implication seems to be that they do not.

 

I'm not implying that at all. I'm sure the way the billing is handled is completely within the law.

 

Let's hold off until you return, shall we? I'll take a bottle of single malt as an apology! ;)

[insanemagnet]

I'm not implying that at all. I'm sure the way the billing is handled is completely within the law.

 

Let's hold off until you return, shall we? I'll take a bottle of single malt as an apology! ;)

 

 

To make it clear, is it that you are asserting that

 

a. they will apply the VAT laws correctly, i.e. there is no VAT due when customer has a promo UBP; or

 

b. they will apply the VAT laws incorrectly, i.e. they will try to charge VAT when none is due since the customer has a promo UBP.

[Guindalf]

To make it clear, is it that you are asserting that

 

a. they will apply the VAT laws correctly, i.e. there is no VAT due when customer has a promo UBP; or

 

b. they will apply the VAT laws incorrectly, i.e. they will try to charge VAT when none is due since the customer has a promo UBP.

 

Neither. They will apply the VAT laws correctly in that you will be charged for each drink, plus gratuity, plus tax. Then you will be refunded (zero billed) for the drink and gratuity, therefore there will be a charge for an amount equal to the VAT on your account.

 

It's all in the accounting.

[insanemagnet]

Neither. They will apply the VAT laws correctly in that you will be charged for each drink, plus gratuity, plus tax. Then you will be refunded (zero billed) for the drink and gratuity, therefore there will be a charge for an amount equal to the VAT on your account.

 

So your belief is that they will apply try to charge VAT where no VAT is due.

 

That should make an interesting conversation at the customer service desk, and potentially a disputed credit card charge if they persist in trying to charge an amount that is not due.

 

Perhaps you could explain how "the accounting" manages to create a taxable amount from zero.

[Guindalf]

No.

 

I'm done.

 

I'm not going round in circles.

 

I don't work for NCL. I don't make the rules. I don't know how they justify it. Find out for yourself.