VAT tax on European Sailings.

[room with a view]

Received an email from NCL that ..."Due to local tax regulations that a 21% Spanish VAT tax will be added to applicable retail items purchased on board for sailins departing from Spain and departing European port cities . Additionally a 10% VAT  will be applies to all food and beverage packages made onboard , including purchases made under our  unlimited open bar or speciality dining packages foe certain sailings departing from Spain or any European itinerary while in Spanish waters."

[fredflint]

When in Spain taxed liked a Spaniard etc....

Buy ahead and you are fine. 

[room with a view]

We have the drinks package and the speciality meals package purchased with our cruise . 

This reads as if the charge will be on regardless.

[BirdTravels]

40 minutes ago, room with a view said:

Received an email from NCL that ..."Due to local tax regulations that a 21% Spanish VAT tax will be added to applicable retail items purchased on board for sailins departing from Spain and departing European port cities . Additionally a 10% VAT  will be applies to all food and beverage packages made onboard , including purchases made under our  unlimited open bar or speciality dining packages foe certain sailings departing from Spain or any European itinerary while in Spanish waters."

 

[room with a view]

Hi Bird, thanks for the link.

That's a lot to get through !!!  ...

though if I have purchased a drinks package and speciality dining as part of the cruise ...paid before sailing . I can't see how the EU or any Spanish or NCL can level an additional charge .

This also applies to Greece, France, Portugal and many other European countries.

[room with a view]

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

[Asawi]

I don't understand this! The email in post one by @room with a view is very recent. And then there's the letter posted in the other thread and reposted here that, in my view, contradicts it.

(Not that I currently have a med/Spain cruise booked. thinking ahead though. This summer the ones that boarded i Italy didn't get charged but those that boarded in Barcelona did. As deiscussed in the other thread.)

[room with a view]

We board in Bilbao (Spain) and disembark in Rome ....very confusing .

[JandC_Cruising]

We just got off the Getaway last Tuesday (Lisbon to Southampton) with stops in Vigo, La Coruna, and Bilboa Spain.  We were charge 10% tax on every drink throughout those 3 days in Spanish waters, regardless of being in-port or on sea in the evenings.  We had the Premium Plus package and the taxes totaled $56.60.

Once we were out of Spanish waters, we didn't get charged any taxes on any other drinks through the cruise. 

 

[DCGuy64]

I'm not sure why some people don't understand this. It's no different than being taxed on drinks when in a US port. We always get the UBP, but when our ship was docked in Miami and in San Juan, PR, we had to pay local sales tax on the drinks, even though we had the drinks package. From NCL's point of view, as I understand it, the UBP doesn't normally constitute a "sale" because it was paid for prior to the start of the cruise, whereas a single drink purchased outside of the unlimited beverage package IS. If Spain charges VAT on drinks consumed in Spanish waters, that's not NCL's doing, it's Spain's. So that's the norm. What happened to the person referenced in the post quoted by OP was a mistake which was acknowledged and credited back to affected passengers.

[Asawi]

27 minutes ago, DCGuy64 said:

I'm not sure why some people don't understand this. It's no different than being taxed on drinks when in a US port. 

1. Some of us aren't Americans that cruise in US waters/ports. (I have only cruised Alaska on that side of the Atlantic and no VAT added there)

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).

3. The letter in post #6 seems to contradict what is said in the email quoted in post #1 regarding drinks package.

 

(To add to the confusion, it "should" be the same for Italy, but it seems like Italy doesn't enforce the tax, as has been discussed earlier.)

[eileeshb]

1 hour ago, DCGuy64 said:

I'm not sure why some people don't understand this. It's no different than being taxed on drinks when in a US port. We always get the UBP, but when our ship was docked in Miami and in San Juan, PR, we had to pay local sales tax on the drinks, even though we had the drinks package. From NCL's point of view, as I understand it, the UBP doesn't normally constitute a "sale" because it was paid for prior to the start of the cruise, whereas a single drink purchased outside of the unlimited beverage package IS. If Spain charges VAT on drinks consumed in Spanish waters, that's not NCL's doing, it's Spain's. So that's the norm. What happened to the person referenced in the post quoted by OP was a mistake which was acknowledged and credited back to affected passengers.

There are more European guests on the European cruises and the addition of VAT/TVA after the fact on a purchase is not normal here. The USA is practically the only place where sales tax is not built into the ticketed price. Also there is an EU advertising standards issue on travel pricing that unavoidable taxes are supposed to be included in the baseline price. And there’s the inconsistencies between different cruiselines, some pass the charge onto the guest others don’t. All of those factors are why this issue comes up time and again. 
btw that letter that mentions being able to reclaim VAT after leaving the EU it is only possible to reclaim some of the VAT paid on goods,  not on consumed food and beverages or services. 

[YORKI1]

1 hour ago, DCGuy64 said:

I'm not sure why some people don't understand this. It's no different than being taxed on drinks when in a US port. We always get the UBP, but when our ship was docked in Miami and in San Juan, PR, we had to pay local sales tax on the drinks, even though we had the drinks package. From NCL's point of view, as I understand it, the UBP doesn't normally constitute a "sale" because it was paid for prior to the start of the cruise, whereas a single drink purchased outside of the unlimited beverage package IS. If Spain charges VAT on drinks consumed in Spanish waters, that's not NCL's doing, it's Spain's. So that's the norm. What happened to the person referenced in the post quoted by OP was a mistake which was acknowledged and credited back to affected passengers.

This issue is not the same as being taxed on drinks when in a US port.

[DCGuy64]

1 hour ago, Asawi said:

1. Some of us aren't Americans that cruise in US waters/ports. (I have only cruised Alaska on that side of the Atlantic and no VAT added there)

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).

3. The letter in post #6 seems to contradict what is said in the email quoted in post #1 regarding drinks package.

 

(To add to the confusion, it "should" be the same for Italy, but it seems like Italy doesn't enforce the tax, as has been discussed earlier.)

 

24 minutes ago, eileeshb said:

There are more European guests on the European cruises and the addition of VAT/TVA after the fact on a purchase is not normal here. The USA is practically the only place where sales tax is not built into the ticketed price. Also there is an EU advertising standards issue on travel pricing that unavoidable taxes are supposed to be included in the baseline price. And there’s the inconsistencies between different cruiselines, some pass the charge onto the guest others don’t. All of those factors are why this issue comes up time and again. 
btw that letter that mentions being able to reclaim VAT after leaving the EU it is only possible to reclaim some of the VAT paid on goods,  not on consumed food and beverages or services. 

Europeans have to pay VAT, too. I still don't see the issue here. I'm an American, I've been to Europe probably 60 times. Anytime I buy ANYTHING in Europe, including drinks, I pay VAT (even though VAT goes to pay for things I don't directly benefit from as a non-European). The only time I'm entitled to a refund is if I purchase something like goods, in excess of a limit. I've only done that a few times when buying some clothes. (as @eileeshb alluded to, it's not refundable on consumed purchases). All I know for sure is that NCL is telling its customers that VAT will be levied while in Spanish waters. There is, I believe, a different thread on CC right now saying that NCL is, or was, giving passengers 40 Euros credit to compensate for the VAT they're required to collect on behalf of the Spanish government. One thing I know for sure is that paying taxes is NEVER optional. If some cruise lines build the taxes in and others don't, they still pay, one way or the other.

[DCGuy64]

Just now, YORKI1 said:

This issue is not the same as being taxed on drinks when in a US port.

Sure it is, we have sales tax, Europe and the UK have VAT. It's exactly the same.

[eileeshb]

15 minutes ago, DCGuy64 said:

Sure it is, we have sales tax, Europe and the UK have VAT. It's exactly the same.

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. 

Edited August 14, 2023 by eileeshb
Added clarification

[Odin's Raven]

The reason people are getting upset about this is they bought a drink package for a fee pre cruise. Now with less than two weeks to go for their cruise people are receiving E mails from NCL saying you will be charged 10% for every drink you have on your pre paid package. It’s something that should have been explained when booking the cruise but it has been hidden up until now . This  is not right . Other cruise lines absorb this in their initial costings to customers so you know exactly what you are paying I feel a bit cheated even before I get on my cruise . 

[DCGuy64]

4 minutes ago, 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.

You misunderstood what I wrote. What I said was that both the US and Europe have taxes, and so does the UK. THAT'S what I meant about them being the same. Sure, in the US, sales tax isn't included, and in Europe, it is. That's irrelevant. But both entities have taxes. The US has local sales tax, because unlike Europe, there is no such thing as a national sales tax in the US. If European passengers pay VAT ahead of time on NCL cruises in Europe and are then expected to pay an additional VAT onboard (essentially paying twice), then yes, I'd agree with you that's not right. But I assume we are talking here about taxes and not gratuity, which IS charged ahead of time for US passengers, and I've seen people on here complain that they 'already paid taxes' on the drink package, which is false. US passengers prepay the gratuity ahead of time on FAS items like specialty dining and drinks, but NOT taxes.

[DCGuy64]

7 minutes ago, Odin's Raven said:

The reason people are getting upset about this is they bought a drink package for a fee pre cruise. Now with less than two weeks to go for their cruise people are receiving E mails from NCL saying you will be charged 10% for every drink you have on your pre paid package. It’s something that should have been explained when booking the cruise but it has been hidden up until now . This  is not right . Other cruise lines absorb this in their initial costings to customers so you know exactly what you are paying I feel a bit cheated even before I get on my cruise . 

Meh, this is a tempest in a teapot, IMHO. Cruise lines have, buried in their T&C's, all kinds of disclaimers about offerings being changed, itineraries altered, ports skipped, food and beverage items being unavailable, and so on. I'm sure they're within their rights to claim that if Spain (or any other country) decides to levy a tax while the ship is in their territorial waters, they have to pass that on. If people don't like it, they can cancel, or just decide (as we do) to go ahead and pay the taxes and have a good time, anyway. 1/2 the time the people on Cruise Critic are boasting about their B2B cruises and their love of the Haven, so it's hardly going to bankrupt them if they have pay 10% more for a drink. I refuse to get too bothered about trivial stuff like this. If others want to let it ruin their holiday, that's up to them.

[Odin's Raven]

4 hours ago, 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

Why has did this happened yet others are being charged ?

[room with a view]

Not  a case of ruining our holiday ... matter of interest we in the UK for a 12 day European cruise pay £249 each for the "free at sea " package ..£498 ..  equal to 632 US  Dollars .

 

What is the charge for a 12 night FAS when booked in the USA ?

[YORKI1]

8 minutes ago, Odin's Raven said:

Why has did this happened yet others are being charged ?

No one is quite sure, although this letter relates to a 2016 cruise.

[schmoopie17]

This is one of those things that nobody fully understands or can explain. Kind of like the meaning of life.

Maybe Monty Python can explain...

[DCGuy64]

5 minutes ago, room with a view said:

Not  a case of ruining our holiday ... matter of interest we in the UK for a 12 day European cruise pay £249 each for the "free at sea " package ..£498 ..  equal to 632 US  Dollars .

 

What is the charge for a 12 night FAS when booked in the USA ?

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.

[hawkeyetlse]

6 minutes ago, YORKI1 said:

No one is quite sure, although this letter relates to a 2016 cruise.

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.