Cruise line’s ‘all-inclusive’ drinks package doesn’t apply in Spanish waters

[BVILady]

Just read this article:

“Free at Sea” – that is the name of the all-inclusive drinks and WiFi package offered by Norwegian Cruise Line (NCL).

But passengers who paid hundreds of pounds for the deal are furious to find that they face additional charges when drinking in Spanish waters. On voyages beginning at ports in Spain, and while in Spanish territorial waters during other cruises, they must pay 10 per cent in VAT on every drink.

The tax also applies if they dine at one of the “specialty” restaurants on board an NCL ship. A meal in one of these à la carte restaurants is included in the package – but “Free at Sea” passengers now face a bill for tax on the cost of whatever they order.

People who had booked the package, which typically costs £20 per person per day, were told: “10 per cent VAT will be applied to all food and beverage purchases made onboard, including purchases made under our Unlimited Open Bar or Specialty Dining packages, for certain sailings departing from Spain or any European itinerary while in Spanish waters.”

The authorities in Madrid take the view that as tourists on dry land pay tax on their food and drink, those aboard ships should do the same.

The policy was brought in during the spring of 2023. But passengers who bought packages after it was introduced were told only later that “inclusive” did not include Spanish tax.

Anyone aware of this new tax.

[At7Seas]

Well, since this is the Costa forum and I was until today on the Firenze with disembarkation in Barcelona as fourth Spanish port during the cruise I can report that not a single cent for taxes was added to my board account. The only thing I saw was that the package price for purchase aboard went up during the cruise. Whether it is encouraging early bird bookings or is connected to taxation I don‘t know. Prices for example for Sushi or Pizza speciality restaurants remained the same.

[Despegue]

False news. The vessels are not flagged in Spain, and as long as they register the sale when in International Waters, no VAT is payable.

[At7Seas]

What NCL did is quite present throughout the media.
 
VAT throughout the EU is a very complex thing. While the general rule is that the customer pays according to the rules of the country the seller conducts his business (this might be broken down to branch level) there are a lot of exemptions. While companies with a small turnover in another country are not effected the larger sellers might have to pay according to the place the consumer is when factually getting the product. And within the EU framework every country can do different things as well. While drinks in Spain are taxed at 10% as discussed here Hungary applies a rate of 27%.
 
There are so many detailed rules that I would not easily call this false news. On the other side I would not rule out that there is a cruise company that makes abuse of such a rule and another line simply flattens out such a tax in the total price, which is of course in times of inflation subject to changes anyway. If we assume that a cruise line sells 5% of their drinks within Spanish legislation and the tax is 10% this results in 0.5% price increase of all drinks throughout all sailings, So it is a low one digit cent amount per drink. This we don’t recognise and there is no outcry.

 

[RD64]

This is very old news.