VAT tax added to Dining package!??

[clmom]

We recently sailed on the Equinox from Barcelona. This was a sailing beginning with an overnight in Barcelona. When we boarded we were approached by a staff member who was selling a Specialty Dining package (buy 4, get one free). Deciding it was worthwhile for us, we signed up, $125 per person, and signed the receipt for a total of $250. Imagine our surprise when we pulled up our billing portfolio a few days later and saw that we had been charged $275 for the Dining Package. We brought our signed receipt to the Guest Services Desk and asked about the extra $25 charge. Without a pause we were informed it was a VAT (value added tax) assessed because we had signed up for the package "while we were still tied up to the pier" in Barcelona! We were never informed of this extra charge nor was it noted on our receipt. We have never heard of this policy, and, whether it is legal or not, the fact that we were not informed nor was it added to our signed receipt, we had no intention of paying it. The staff member made a copy of our receipt, told us it would be looked into, and a day later we noticed it was taken off our portfolio charges. The issue was resolved but left a sour note with us.

This is a good lesson to check your portfolio regularly!

[kevinyork]

We recently sailed on the Equinox from Barcelona. This was a sailing beginning with an overnight in Barcelona. When we boarded we were approached by a staff member who was selling a Specialty Dining package (buy 4, get one free). Deciding it was worthwhile for us, we signed up, $125 per person, and signed the receipt for a total of $250. Imagine our surprise when we pulled up our billing portfolio a few days later and saw that we had been charged $275 for the Dining Package. We brought our signed receipt to the Guest Services Desk and asked about the extra $25 charge. Without a pause we were informed it was a VAT (value added tax) assessed because we had signed up for the package "while we were still tied up to the pier" in Barcelona! We were never informed of this extra charge nor was it noted on our receipt. We have never heard of this policy, and, whether it is legal or not, the fact that we were not informed nor was it added to our signed receipt, we had no intention of paying it. The staff member made a copy of our receipt, told us it would be looked into, and a day later we noticed it was taken off our portfolio charges. The issue was resolved but left a sour note with us.

 

This is a good lesson to check your portfolio regularly!

 

 

 

VAT is added if in Spanish ports or I believe if it's a round trip from Spanish ports. What went wrong here was the person who signed you up should have been upfront about the additional tax.

 

 

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[jelayne]

The charge was legit but you should have been informed of the VAT when you purchased the package.

[fshagan]

Isn't VAT always supposed to be "hidden" in the price of the product?

 

Not sure about Spanish / EU law on this, but all of my EU customers at work build the VAT into the final price of the product and don't add it on like we do sales tax in North America.

[Bo1953]

There have been several threads about VAT being charged while in some Euro ports, most famously, Spanish.

 

bon voyage

[RDC1]

The VAT in European ports and sales taxes in US ports like New York generally get added by the ships accounting system. I doubt if the crew selling things are aware of all of the different tax complications that occur. Been on a lot of cruises and in a lot of ports on different lines, not once has the individual selling something said anything about local taxes.

[Hlitner]

The VAT in European ports and sales taxes in US ports like New York generally get added by the ships accounting system. I doubt if the crew selling things are aware of all of the different tax complications that occur. Been on a lot of cruises and in a lot of ports on different lines, not once has the individual selling something said anything about local taxes.

 

The crew members are well aware of the tax issues, but sometimes either forget or just do not bother to mention it. With some EU itineraries it has become nearly impossible to avoid paying VAT for onboard purchases (although VAT is not applied to pre-cruise purchases). In some ports, such as in Florida, the local sales tax is supposed to be applied to purchases until the ship is clear of the 3 mile limit. But there are sometimes helpful crew members. Last year when we boarded the Eclipse at Miami....we decided to upgrade to the Premium Drink Package which cost nearly $300 for the cruise. We happened to see a bar tender friend (knew him well from previous cruises) who was selling the drink packages. We asked about the tax..and he said, "no problem....we will just not run the sale until after the ship has sailed." Otherwise we would have simply delayed purchasing the upgrade until later that afternoon.

 

Hank

[brfan]

Sometimes what they do, and I don't know if this is possible in this particular circumstance, is they will write up the receipt and not charge you until the ship is in international waters and therefore not charge the tax. I've had them do that when I upgrade the drink package while still in port in Florida and they haven't added the tax. However I don't know if that was possible with this particular cruise as I'm not that familiar with the rules as it relates to VAT.

 

I'm wondering if that was the plan and the person who entered the charge either did it too soon (before ship left) or mistakenly added the tax after the ship had left? That might have explained why the OP wasn't advised of the tax as it was assumed it wouldn't be charged?

[JAF1]

Isn't VAT always supposed to be "hidden" in the price of the product?

 

Not sure about Spanish / EU law on this, but all of my EU customers at work build the VAT into the final price of the product and don't add it on like we do sales tax in North America.

 

In the UK VAT has to be included in all prices but when sailing from a Spanish port it is normally shown as an additional item. This is normally mentioned in the small print prior to sailing so should not really come as a surprise.

[DYKWIA]

Sometimes what they do, and I don't know if this is possible in this particular circumstance, is they will write up the receipt and not charge you until the ship is in international waters and therefore not charge the tax. I've had them do that when I upgrade the drink package while still in port in Florida and they haven't added the tax. However I don't know if that was possible with this particular cruise as I'm not that familiar with the rules as it relates to VAT.

 

I'm wondering if that was the plan and the person who entered the charge either did it too soon (before ship left) or mistakenly added the tax after the ship had left? That might have explained why the OP wasn't advised of the tax as it was assumed it wouldn't be charged?

 

Some of the Equinox Cruises this summer have not been leaving the EU and therefore VAT would be charged throughout the cruise

[fshagan]

In the UK VAT has to be included in all prices but when sailing from a Spanish port it is normally shown as an additional item. This is normally mentioned in the small print prior to sailing so should not really come as a surprise.

 

It's a shame that meals and lodging do not allow you to apply for a refund of the VAT like you can for clothing and other goods.

[DYKWIA]

It's a shame that meals and lodging do not allow you to apply for a refund of the VAT like you can for clothing and other goods.

 

I think it is because the goods (food and lodging) are consumed / used within the country / the EU . Clothing and other goods are ultimately for export.

Edited October 9, 2016 by DYKWIA

[cublet]

Hello,

 

You will be charged Spanish VAT (IVA) on any purchase whilst in Spanish waters (it's actually a little more complicated than that but it's a good enough 'rough and ready' starting point) regardless of the cruise's starting point.

 

You will be charged Spanish VAT on all purchases made during a cruise that starts and returns in Spain *IF* the ship does not stop in a non-EU country or an EU country that is not part of the EU Customs Union, eg Gibraltar.

 

Regards,

Cublet

(A bean counter now retired)

[Riocca]

It's a very confusing EU rule as it's up to the member country if they implement it or not, basically for any cruise starting in a member country that does not visit a non-EU country as part of the country can have that country's VAT charged for the duration of the cruise.

However there's some disparity on the items that carry VAT, for example this year we have had two cruises that VAT was charged on. First was from Southampton (UK) to Barcelona and for all goods and services purchased onboard UK VAT was added at 20% but I don't know if it applied to food and beverage as we had packages. Second was Rome to Athens and Italian VAT at 22% was added to all goods and services but not food and beverage.

Spain was the first country to implement it with a 10% tax added to all purchases made while the ship was in Spanish waters, as we have not started a cruise in Spain for a while I don't know if this has been extended to match the UK and Italy.

It could in theory be implemented by any EU country where cruises start, as the rates and rules vary country to country it does become complicated, for the cruise that started in Italy the ship which had an onboard currency of US$ had to provide a written receipt showing the amount and VAT charged in Euros for every transaction using the official exchange rate for that day!

 

 

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[bluwes]

It's a very confusing EU rule as it's up to the member country if they implement it or not, basically for any cruise starting in a member country that does not visit a non-EU country as part of the country can have that country's VAT charged for the duration of the cruise.

However there's some disparity on the items that carry VAT, for example this year we have had two cruises that VAT was charged on. First was from Southampton (UK) to Barcelona and for all goods and services purchased onboard UK VAT was added at 20% but I don't know if it applied to food and beverage as we had packages. Second was Rome to Athens and Italian VAT at 22% was added to all goods and services but not food and beverage.

Spain was the first country to implement it with a 10% tax added to all purchases made while the ship was in Spanish waters, as we have not started a cruise in Spain for a while I don't know if this has been extended to match the UK and Italy.

It could in theory be implemented by any EU country where cruises start, as the rates and rules vary country to country it does become complicated, for the cruise that started in Italy the ship which had an onboard currency of US$ had to provide a written receipt showing the amount and VAT charged in Euros for every transaction using the official exchange rate for that day!

 

 

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We have just come back from a cruise on the Carnival Vista sailing between Athens and Barcelona. Because they pulled the Turkey port stops, we had no Non EU ports. As a result we were charged at the Greek VAT rate which is a massive 24% all they way around.

Taking into account the 15% gratuities as well that adds up to 40% on top of every drink purchased.

[steamboats]

Sorry that you didn´t know about this and wasn´t informed by the crew. This is going on for years know. But anyway there should be a note in the cruise daily too.

 

Spain has a 21% VAT and a reduced VAT of 10% for food and other things (dining package counts as food therefore 25 USD/10% VAT).

 

When you purchase anything on land in Europe the VAT is already included in the tagged price. Therefore we Europeans are not used to pay anything extra up on the tagged price. Cruise ships do add the VAT to their tagged prices (as this is common with the State or sales taxes in the US).

 

steamboats

[trk_koa]

So if my DH and I want to buy the UDP on our TA embarking in a Barcelona, we will pay 10% more per day? Since the UDP has limited availability, we would need to purchase right away as we embark, correct? It can't be purchased pre-cruise.

[steamboats]

As for the TA, yes, the 10% apply as long as you are in port in Barcelona plus until you´ve left the 3 mile zone (about an hour after departure) - unless you hit another Spanish port on the TA (except for the Canary Islands).

 

Even for online purchases the VAT was added - at least for those closed loop cruises out of Barcelona without a non EU port.

 

steamboats

[clmom]

Thanks for all the replies...and good international tax lessons! We did have a port stop in Gibraltar if that is notable for future cruisers. We are now better informed and will pay attention from now on. I guess we haven't been in this situation (buying dining/drinking packages, etc) before so were a little thrown by the surprise charge. Cruise Critic is great for this kind of information!

[DYKWIA]

Thanks for all the replies...and good international tax lessons! We did have a port stop in Gibraltar if that is notable for future cruisers. We are now better informed and will pay attention from now on. I guess we haven't been in this situation (buying dining/drinking packages, etc) before so were a little thrown by the surprise charge. Cruise Critic is great for this kind of information!

 

Gibraltar, Kotor Montenegro, Turkey, Canary Islands (e.g. Tenerife / Gran Canaria ) Guernsey, Norway, Russia - are the common European Cruise ports that = tax free cruising!

[trk_koa]

As for the TA, yes, the 10% apply as long as you are in port in Barcelona plus until you´ve left the 3 mile zone (about an hour after departure) - unless you hit another Spanish port on the TA (except for the Canary Islands).

 

Even for online purchases the VAT was added - at least for those closed loop cruises out of Barcelona without a non EU port.

 

steamboats

 

 

 

We go to Cartagena from Barcelona, so it won't be easy to avoid that extra tax for the UDP.

[steamboats]

The stop in Gibraltar is regarded as non EU and therefore they don´t have to claim the VAT for the whole cruise but only within that 3 mile zone and in port of a Spanish city.

 

trk_koa, yes you have to pay the VAT as long as you are in port in Barcelona and within the 3 mile zone leaving Barcelona. As you have to buy the package as soon as you board you can´t avoid the VAT.

 

steamboats

[Bobal]

We have left Barcelona on Transatlantics the last two years and both times they have waited to add the dining packages to the account once we have left Spanish waters so we didn't incur the extra VAT. It's a good reminder from the OP to check that will be the case.

[cruiserfromohio]

What you encountered is a Spanish only tax. We just off a cruise that had three stops in Spain. Before every port there was a notice that there was a 12% (I believe) tax imposed by Spain on drinks, etc. purchased while the ship was in port. You should have been told, but the job of the person who sold you the dinning package was to sell package not inform you of port-to-port variations. Given that you weren't properly informed and could have avoided the tax by waiting, Celebrity should have eaten the tax.

[DYKWIA]

... Given that you weren't properly informed and could have avoided the tax by waiting, Celebrity should have eaten the tax.

 

Have Celebrity done anything wrong by processing the bill and charging you the tax? - the tax is due at the point of sale and as the customer you are required to pay it. Technically, I think, you're only avoiding it because someone appears to be delaying putting the sale through the system - from a legal point should that person be doing this, if it's being doing for the purpose of evading or avoiding paying the tax?