10% VAT tax added to all "free at sea drinks" on NCL while in Med?

[DCGuy64]

18 minutes ago, rachiem said:

but it doesn't even mention this on new bookings going forward. Someone had an email stating Spanish ports...but it's clearly extending beyond those now

This versus

11 minutes ago, hoops71 said:

Really confused now.  Been following this thread for about month because I was sure I would have to deal with the issue.  However, just got off the Viva Rome to Lisbon yesterday.  It stopped in Italy, France, Spain and Portugal.  Yet we were never charged VAT on any of our drink package or even on a couple of upgraded drinks.  Whatever is happening seems to be ship to ship.

That. ^

I hope @rachiem will appreciate the difficulty of trying to inform every passenger ahead of time about a situation that is this fluid. If it's happening only from time to time or on some ships but not others, it essentially makes it impossible/unreasonable to post information about it for new bookings going forward. Just chalk it up (as I do) to "items subject to change."

[joandy2425]

19 minutes ago, rachiem said:

My brother is also on this cruise! So VAT is added to the VAT 🤷‍♀️

 

That's what it seems like 🤔🤷‍♀️

[DCGuy64]

1 minute ago, joandy2425 said:

I don't have any issue with paying anything that's due but it certainly doesn't seem very transparent or consistent.

Inconsistent and non transparent. You've just described the EU to a "T." 😉

[joandy2425]

3 minutes ago, DCGuy64 said:

This versus

That. ^

I hope @rachiem will appreciate the difficulty of trying to inform every passenger ahead of time about a situation that is this fluid. If it's happening only from time to time or on some ships but not others, it essentially makes it impossible/unreasonable to post information about it for new bookings going forward. Just chalk it up (as I do) to "items subject to change."

Which is fine....unless you're trying to budget for your holiday 🤷‍♀️

[DCGuy64]

4 minutes ago, joandy2425 said:

Which is fine....unless you're trying to budget for your holiday 🤷‍♀️

Oooh, I think if the VAT is a "make it or break it" item for your holiday, you might be in over your head already. I highly doubt the average cruiser is considering cancelling an entire cruise over one tax. That's like saying you have enough for the meal, but not the tip. Yeah, no....

[schmoopie17]

24 minutes ago, DCGuy64 said:

If it's happening only from time to time or on some ships but not others,

In that case, does VAT stand for Vapid Arbitrary Tax?

[DCGuy64]

Just now, schmoopie17 said:

In that case, does VAT stand for Vapid Arbitrary Tax?

CC rules prohibit me from answering that question honestly. 🤣

[Asawi]

29 minutes ago, hoops71 said:

Really confused now.  Been following this thread for about month because I was sure I would have to deal with the issue.  However, just got off the Viva Rome to Lisbon yesterday.  It stopped in Italy, France, Spain and Portugal.  Yet we were never charged VAT on any of our drink package or even on a couple of upgraded drinks.  Whatever is happening seems to be ship to ship.

 

Yeah... it seems that boarding in Italy makes a difference to Spain or (recently) France. Odd...
But as long as I know beforehand what costs I might run into I can to some degree plan. So for example I made sure my Le Bistro booking on my TA isn't when we're anywhere near France (20% VAT) because that would rack up a VAT cost of around $20 which I'd rather not pay. (It's still unclear if speciality dinners get charged or not.)
I have decided to expect 10-20% VAT and plan accordningly. If it's not charged - great!

If someone doesn't want to pay drinks surcharges there's always the option to not drink...

 

 

[KeithJenner]

46 minutes ago, DCGuy64 said:

Oooh, I think if the VAT is a "make it or break it" item for your holiday, you might be in over your head already. I highly doubt the average cruiser is considering cancelling an entire cruise over one tax. That's like saying you have enough for the meal, but not the tip. Yeah, no....

I agree that this is unlikely to be make or break about going on the cruise, but there are other elements involved in planning and budgeting.

 

For example, we usually take Free at Sea Plus, although the cost of it is already close to the maximum that we think it is worth paying for the package. As a result of having free at sea, we get through quite a lot of bottled water, and are generally drinking $25-$30 glasses of wine rather than $10-$15. The extra VAT that would be payable on those drinks for an entire cruise is almost certainly enough to push that package into a "not worth it" price.

 

We are doing the Lisbon to Rome trip next Spring, which is currently not one where the tax is charged. It would be annoying to pay for the upgraded package and then find that something changes which means that we wouldn't have upgraded had we known.

[DCGuy64]

3 minutes ago, KeithJenner said:

For example, we usually take Free at Sea Plus, although the cost of it is already close to the maximum that we think it is worth paying for the package. As a result of having free at sea, we get through quite a lot of bottled water, and are generally drinking $25-$30 glasses of wine rather than $10-$15. The extra VAT that would be payable on those drinks for an entire cruise is almost certainly enough to push that package into a "not worth it" price.

Sorry, but I don't accept your reasoning here. If you can not only afford the cruise in the first place, and then not just the regular Unlimited Beverage Package, and not only Premium Plus but Free at Sea Plus, then I don't buy the argument that a tax levied by a foreign government which has to be collected by the cruise line puts you over the budgetary edge. I'm sorry, I just don't. I think it's more likely that you are annoyed at the prospect of having to shell out more money, and I don't blame you for that. (I'd be very much put off, too.) But no, cruising is a luxury activity and if anything, I'd recommend people cancel their FAS Plus or downgrade to the "regular" UBP to make up for the VAT, if it comes to that.

[SteveH2508]

I'm afraid to say that NCL seem to have some systemic confusion at the moment. Adding VAT onto VAT is just plain wrong.

 

We are on Prima, Rome to Barcelona in November. I shall not stress on this VAT stuff because we have $200 OBC buckshee due to NCL's screw up (don't ask!), which should cover most of it.

[KeithJenner]

17 minutes ago, DCGuy64 said:

Sorry, but I don't accept your reasoning here. If you can not only afford the cruise in the first place, and then not just the regular Unlimited Beverage Package, and not only Premium Plus but Free at Sea Plus, then I don't buy the argument that a tax levied by a foreign government which has to be collected by the cruise line puts you over the budgetary edge. I'm sorry, I just don't. I think it's more likely that you are annoyed at the prospect of having to shell out more money, and I don't blame you for that. (I'd be very much put off, too.) But no, cruising is a luxury activity and if anything, I'd recommend people cancel their FAS Plus or downgrade to the "regular" UBP to make up for the VAT, if it comes to that.

Upgrading the beverage package costs about £40-50 a day cruise for the two of us. That is the top end of what we think it is worth for us.

 

By my reckoning, the extra tax we would pay by getting the drinks that this package includes, rather than the ones included in the standard package would be around £25 a day. That is around half the cost of a package, which was borderline worth it to start with.

 

Yes, I can afford to pay that, but we all make decisions about whether things are worth it to us. We can't buy everything.

 

This is a significant difference on the cost of the package, and would make a difference on whether or not we get it.

 

That really isn't complicated reasoning.

 

I'm not annoyed with paying extra. I have done quite a few NCL cruises where the tax is paid on the entire cruise (at least 5 of them, before the drink package existed, so we all had to just pay the tax), but I knew in advance for certain that the tax would be payable. The issue here for me is the uncertainty, which makes planning a problem. If I knew that we would be paying the tax then I wouldn't upgrade.

[KeithJenner]

3 minutes ago, SteveH2508 said:

I'm afraid to say that NCL seem to have some systemic confusion at the moment. Adding VAT onto VAT is just plain wrong.

 

We are on Prima, Rome to Barcelona in November. I shall not stress on this VAT stuff because we have $200 OBC buckshee due to NCL's screw up (don't ask!), which should cover most of it.

I don't think that they are adding VAT onto VAT. It looks to me like they are charging VAT on the drinks (20% of £17) and also on the Service Charge (10% of £3.40).

 

If there is an error then maybe the VAT on the Service Charge should be at the same rate as the supply. That is the rule in the UK anyway.

[DCGuy64]

53 minutes ago, KeithJenner said:

This is a significant difference on the cost of the package, and would make a difference on whether or not we get it.

 

That really isn't complicated reasoning.

 

I'm not annoyed with paying extra. I have done quite a few NCL cruises where the tax is paid on the entire cruise (at least 5 of them, before the drink package existed, so we all had to just pay the tax), but I knew in advance for certain that the tax would be payable. The issue here for me is the uncertainty, which makes planning a problem. If I knew that we would be paying the tax then I wouldn't upgrade.

I hear what you're saying. Then the choice is yours: not pay for an upgrade offered by the cruise line (their choice to offer it, your choice about whether to purchase it), or pay for the upgrade and any additional fees or taxes levied by the governments of the ports you are scheduled to visit (NOT NCL's choice, because it's not their fee).

 

53 minutes ago, KeithJenner said:

Yes, I can afford to pay that, but we all make decisions about whether things are worth it to us. We can't buy everything.

100% right. If the upgrades you were planning on are no longer worth it due to the possibility of VAT being tacked on, that's a conversation you need to have and decide if it's still worth it.

Every time we consider booking a cruise, a number of factors go into it. We have opted not to pay for Premium Plus beverages nor FAS Plus because the value isn't there for us.

Just for kicks I did a little math, and if I had 5 drinks a day @ $15, then adding 20% in VAT would yield an additional $150 in taxes over the 10-day period of our cruise. I'm not going to lose sleep over that. And that's assuming VAT is applied in Italy, Greece and Malta.

Regardless, the one entity I do not blame is NCL. They have no sway over taxes charged by governments. Of course, my wife and I could choose to 'avoid' (because it isn't really) the VAT by cruising with Celebrity-and pay more overall. I don't know about you, but paying more overall for something just to hide additional fees isn't really a savings to me.

Edited October 2, 2023 by DCGuy64

[KeithJenner]

12 minutes ago, DCGuy64 said:

Just for kicks I did a little math, and if I had 5 drinks a day @ $15, then adding 20% in VAT would yield an additional $150 in taxes over the 10-day period of our cruise. I'm not going to lose sleep over that. And that's assuming VAT is applied in Italy, Greece and Malta.

Regardless, the one entity I do not blame is NCL. They have no sway over taxes charged by government. Of course, my wife and I could choose to 'avoid' (because it isn't really) the VAT by cruising with Celebrity-and pay more overall. I don't know about you, but paying more overall for something just to hide additional fees isn't really a savings to me.

I don't think that there is any suggestion at the moment that the VAT will apply on the Breakaway itinerary. I expect your VAT bill to be zero.

 

On our one next year, I am currently expecting to have to pay whilst in port a few times. No problem at all, and we will probably go for the lower cost items whilst in port.

 

The issue comes with Free at Sea Plus and a cruise where VAT is charged all the time. Just on Sparkling Water, rather than tap water (we can easily get through 5-6 bottles a day) then it is nearly $10 a day in VAT. Add, say 5 wines each at $25-$30 rather than $10-15 and we have added another $20-30 a day more than the cheaper wine. I enjoy being able to select the nicer wine, but that sort of extra cost would put me off ordering them, which makes the decision to upgrade less clear. The $150 of VAT that you calculated would then become maybe $400-500.

 

I'm not commenting on who to blame. I have my views, but I've commented here just to give an example of how the impact of the VAT (regardless of whose fault it is) does become an issue when making these decisions.

Edited October 2, 2023 by KeithJenner

[DCGuy64]

18 minutes ago, KeithJenner said:

I'm not commenting on who to blame. I have my views, but I've commented here just to give an example of how the impact of the VAT (regardless of whose fault it is) does become an issue when making these decisions.

The vast majority of people who've commented about the recent application of VAT have made it very clear that they blame the cruise line. You are a rare exception to that.

[steamboats]

15 hours ago, DCGuy64 said:

Exactly. Every time I read a comment like "RCI doesn't charge this" I'm like "yes, they do, you just don't see it." (As if a major cruise line is going to break the law in a flagrant manner like that).

 

RCI doesn´t charge the VAT on drinks you order with a package.

 

RCI does charge it when you pay for each single drink.

 

In France it´s the 20% VAT for alcoholic beverages and the 10% VAT on the 20% service charge. It´s not a VAT on the VAT.

 

steamboats

[joandy2425]

16 hours ago, DCGuy64 said:

Oooh, I think if the VAT is a "make it or break it" item for your holiday, you might be in over your head already. I highly doubt the average cruiser is considering cancelling an entire cruise over one tax. That's like saying you have enough for the meal, but not the tip. Yeah, no....

The VAT isn't a "make or break" for us but I do understand how it might be for some.  The cruise we've just returned from was a last minute itinerary and very cheap and may well have seemed like an affordable cruise for anyone who might be on a stricter budget.  Judging by some of the conversations we overhead, the unknown or uncertain issue of VAT on drinks clearly changed the element of affordability for some on board.

 

For the record, we did have enough for the meal and the tip! And we will be booking another cruise with NCL😃

[BunnyHutt]

6 hours ago, steamboats said:

 

RCI doesn´t charge the VAT on drinks you order with a package.

 

RCI does charge it when you pay for each single drink.

 

In France it´s the 20% VAT for alcoholic beverages and the 10% VAT on the 20% service charge. It´s not a VAT on the VAT.

 

steamboats

Dollars to donuts RCI has rolled the VAT into the cost of the drink package using a formula derived by their bean-counters and actuaries. 
 

You just don’t like seeing it separated out, which is a legitimate personal preference. My personal preference is having control over my spend and in the end (based on my personal habits) will most likely spend less than I would if handed a baked-in figure. 

[DCGuy64]

24 minutes ago, BunnyHutt said:

Dollars to donuts RCI has rolled the VAT into the cost of the drink package using a formula derived by their bean-counters and actuaries. 
 

You just don’t like seeing it separated out, which is a legitimate personal preference. My personal preference is having control over my spend and in the end (based on my personal habits) will most likely spend less than I would if handed a baked-in figure. 

I agree with this 100%. As far as I'm aware, no business can legitimately refuse to pay VAT. Maybe there are some exceptions, but my hunch is that if you are a bar, cafe, restaurant, etc. you would get into a lot of trouble if it were discovered that you failed to collect VAT from your customers and remit it to the government. If I'm correct about that, then all cruise lines that operate in the territorial waters of countries that require the collection of VAT have to collect it somehow. Whether that be as part of a package or baked in to the price of the cruise, I simply refuse to believe that cruise lines aren't paying it at all. But I can see where NCL's recent (and very open) policy of adding the VAT to the price of drinks might lead some people to the mistaken conclusion of assuming that ONLY NCL is charging VAT. I highly doubt that, unless their competitors are flouting the law, which would be a bad idea.

[steamboats]

2 hours ago, BunnyHutt said:

Dollars to donuts RCI has rolled the VAT into the cost of the drink package using a formula derived by their bean-counters and actuaries. 
 

You just don’t like seeing it separated out, which is a legitimate personal preference. My personal preference is having control over my spend and in the end (based on my personal habits) will most likely spend less than I would if handed a baked-in figure. 

 

Not that the beverage package of NCL ist any cheaper per day when you buy it separately 🤦 without free at sea. And if you really have to pay the VAT for each drink you can't really count it into the price of the package.

 

And for my Diamond (Crown & Anchor) drinks I don't pay anything at all.

 

And of course when you buy the beverage package onboard in Europe they add the VAT based on the price of the package.

 

What you don't get is that with a zero pay for a single drink there is no value you can add a tax. And BTW it's not just RCI but all other cruise lines which don't add a VAT to a single drink with a package.

 

steamboats 

[BunnyHutt]

7 minutes ago, steamboats said:

 

Not that the beverage package of NCL ist any cheaper per day when you buy it separately 🤦 without free at sea. And if you really have to pay the VAT for each drink you can't really count it into the price of the package.

 

And for my Diamond (Crown & Anchor) drinks I don't pay anything at all.

 

And of course when you buy the beverage package onboard in Europe they add the VAT based on the price of the package.

 

What you don't get is that with a zero pay for a single drink there is no value you can add a tax. And BTW it's not just RCI but all other cruise lines which don't add a VAT to a single drink with a package.

 

steamboats 

And what you don’t get is that the VAT is factored into the cost of the package. I am sure someone in the tax accounting departments of those companies can tell you what that is… as they are the ones calculating and filing the *mandatory* returns. And yes, there is a value to a ‘zero pay’ drink - it’s the ticketed price on the menu, which is why NCL provides the receipt to show how the VAT was calculated. That’s called transparency and is honestly the least convoluted way of doing things for the company… and puts control into the consumer’s hands. 
 

I’ll give you that it is entirely possible that Diamond members don’t pay VAT on their “free” drinks. But I’m assuming there is a limit to the number of those you get per sailing and it’s possible that the value of the VAT that RCI *will* pay on those drinks are written off to some sort of customer goodwill account on the P&L. However, the cruise line is making up for it in an inflated cost elsewhere because, at the end of the day, cruise lines are not not-for-profit organizations. Everything is and will be about maximizing their net income. 
 

Signed, someone who has worked 20+ years in all levels of corporate accounting for multinational organizations. 

[steamboats]

Once again, they don´t need to count it into the package price as they don´t have to pay it for a single drink. That´s what you don´t want to get. A value added tax can be only added to a value. For a value money has to change hands. But no money does change hands when you order a drink with your package. The money changed hands when you bought the package (or Free at Sea). Then you had to pay a VAT in case that purchase was made in Europe.

 

What´s even more strange that they charge a VAT on the Service Charge - that´s an automated gratuity. That´s not part of the taxed value at all (even when you paid for the drink). The gratuity is part of the income of the waiter and therefore the waiter has to pay income tax on this amount...

 

And once again, I am German and I live in Germany and I´m pretty sure that I do know our tax system pretty well ;-).

 

steamboats

[BunnyHutt]

26 minutes ago, steamboats said:

Once again, they don´t need to count it into the package price as they don´t have to pay it for a single drink. That´s what you don´t want to get. A value added tax can be only added to a value. For a value money has to change hands. But no money does change hands when you order a drink with your package. The money changed hands when you bought the package (or Free at Sea). Then you had to pay a VAT in case that purchase was made in Europe.

 

What´s even more strange that they charge a VAT on the Service Charge - that´s an automated gratuity. That´s not part of the taxed value at all (even when you paid for the drink). The gratuity is part of the income of the waiter and therefore the waiter has to pay income tax on this amount...

 

And once again, I am German and I live in Germany and I´m pretty sure that I do know our tax system pretty well ;-).

 

steamboats

What do you mean they don’t have to pay it for a single drink? Of course they do! Do you think that the alcohol in your “free” drink has no cost/value? The cruise line has thousands upon thousands of invoices to prove otherwise. 
 

And for the record, where you live doesn’t guarantee knowledge of your tax system. I know plenty of Americans who have zero clue how US tax code works. 😉

[steamboats]

But you know it better than me...

 

When I do have a drink package I don't pay an amount  for a single drink - period! I paid for the package. And BTW all alcohol onboard is tax free (same on planes). Of course the cruise line has to pay for the ingrediences of the drink but that's their calculation they have to do for the drink package. I don't buy the bottle...

 

You don't want to understand what is target of the VAT - a value / purchase. And the passenger has purchased the package. That's the taxable purchase but not the order of a single drink.

 

steamboats