Beware additional 10% charge on purchases for ships departing Spain

[Redtravel]

After reading the postings I am confused. I paid the Spanish tax when I boarded in Barcelona. I bought a beverage package while we were still docked. What a nasty surprise. Recently, I sailed on celebrity Summit out of Bayonne NJ. Ate lunch the first day in a specialty restaurant. Paid the surcharge plus 7% NJ sate sales tax. I will be on a cruise in August that departs from Southampton UK to Lisbon. Most stops are in France and Portugal. However, we do stop in Bilbao, Spain. I know that if I buy anything while docked in Bilbao, I will pay that nasty tax. However, will I also have to continue paying it after we leave Bilbao and sail into Portugal?

[wiks]

It certainly would be helpful if someone from Oceania who may be monitoring this board would respond with a clarification. I assume they are aware of the "rules".

 

Wiks

 

 

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[JPR]

Bring your own spirits/wine onboard. Note that this tax is applied to Oceania's already inflated charges, including the service charge. Query whether it applies if you buy a beverage package for the entire cruise?

[karska]

I wasn't aware of this tax until reading this thread. Fortunately our cruise in Sept starts in Monte Carlo, then stopping at several ports in Spain, then Portugal and France. If I'm reading this correctly we'll have to pay this tax only while in Spain ports. Thank goodness we can bring wine and spirits on board. Definitely will do that in Monte Carlo. :D:D

[roothy123]

I DID call and ask Oceania about my particular cruise, which is a bit complicated. The customer service rep told me the tax depended upon the particular cruise and venues and I should ask at Reception when I boarded. I am assuming that we'll be charged on our days in (or pehaps approaching or leaving) the Spanish ports but not in the non-Spanish ports, including the Canary Islands, which are exempt. I don't know how the beverage package is handled, but if I were a cruiser starting out in a Spanish port, I would try to pay it in the United States well before boarding (if that's even possible). To those who are hopelessly confused (as I am), it sounds like we'll only be charged when in Spanish waters (although I still have no clue what those are - within 3 miles of the country or more? Celebrity in 2012 notified its cruisers that within 12 miles of the coast they would have to charge it!), only while in port or going out to sea?) but then the P&O stuff sounds like it is not that simple. Also, if you're starting in a Spanish port, you're really in trouble from what I can tell! I'm glad I chose Lisbon to Barcelona rather than the cruise before mine, which goes Barcelona to Lisbon. I'm also glad I can take or leave alcohol, spa products, ship store products, etc. - although I DO have some shipboard credit. Wonder what happens if my husband purchases something in a ship's store to use up the rest of the credit. We'll be cruising near the coast of Spain then...

 

I wish I could find the actual Spanish tax laws to see how they read - but since I don't know Spanish, that wouldn't help me even if I could find them!!

Edited June 23, 2014 by roothy123

[2tsquared]

Thanks to the persistence of my TA, I was able to get a response to the question about the extra VAT tax imposed by countries in the EU. This applies to all EU countries apparently, not just Spain. Looks like we will take advantage of ordering "extra" wine while in Gibraltar and Tangier as well as bringing a couple of bottles of wine on board with us.

 

This was the statement from a supervisor in Oceania's sales office:

 

"Please see the article below. The VAT (Value Added Tax) you and your clients are referencing is a tax imposed by countries belonging to the European Union. It is not an Oceania charge but we, like all other cruise lines, are required to collect it."

 

The article itself was sent via email by an Oceania Sr. VP in Sales.

 

On Europe Cruises, Getting Acquainted with VAT

By Tom Stieghorst

 

I got a question last week from a travel agent whose clients were surprised to see an added charge on their cruise bill whenever they went to the bar. It was an 8% fee for a Value Added Tax, a common feature of taxation in Europe that doesn’t exist in the U.S.

 

The tax comes on top of the 18% gratuity affixed to bar bills on most cruise ships, meaning the two charges together add nearly a quarter of the cost of the drink or bottle of wine to the price.

 

How was this possible? the agent asked.

 

It is a good reminder that European cruises can bring exposure to VAT. It is a tax that members of the European Union are expected to charge, but each country has its own way of doing so.

 

The cruise in question was an Oceania Cruises voyage from Spain, which of all the European countries seems to enforce its version of VAT on cruise ships most vigorously.

 

Different purchases are taxed at different rates. The VAT on bar sales and specialty restaurant cover charges is 8%, while the tax on items bought from retail shops on the ship is 18% and spa treatments can be taxed at either 8% or 18%, depending on the item.

 

Cruises that do a roundtrip itinerary from a Spanish port must charge the tax. Ships making a port of call in Spain are supposed to charge the tax while they are in port or in Spanish waters.

 

There is a further wrinkle. If the cruise visits a non-EU destination, such as Gibraltar or Tangier, the tax no longer applies.

 

Upon leaving the EU, guests from non-EU countries can apply for a refund of the VAT under certain conditions. Be sure to have clients ask for a pamphlet from the cruise line outlining the refund procedure.

 

Receipts from a single store that add up to more than 90.16 euros, or about $130, are eligible for a refund. Receipts from different vendors (i.e. the spa, the photo concession, shops) can’t be combined.

 

Alas, spirits and other goods that have already been consumed aren’t eligible for a VAT refund.

 

 

Hope this info helps.

tt :confused:

[roothy123]

Wow, thank you. I've been waiting for some clarification, and this really helps. However, after reading the letter, I still have a question due to its wording and am curious what your take on the answer might be.

 

I'm still unclear as to what happens if a cruise docks/tenders in ANY non-EU country. Due to that "wrinkle" are the cruise lines simply off the hook for charging ANY Spanish VAT tax, even when in Spanish waters? We go to Gibraltar, so can I assume that NO tax will be charged during the entire cruise, even when we're in Spain? Also, the original poster mentioned a 10% tax on liquor. I'm curious whether the letter in Oceania's response is old, as apparently Spain recently changed its VAT rate, or if the liquor tax IS really "only" 8%!

 

Thanks again for the info!

Edited June 25, 2014 by roothy123

[2tsquared]

Wow, thank you. I've been waiting for some clarification, and this really helps. However, after reading the letter, I still have a question due to its wording and am curious what your take on the answer might be.

 

I'm still unclear as to what happens if a cruise docks/tenders in ANY non-EU country. Due to that "wrinkle" are the cruise lines simply off the hook for charging ANY Spanish VAT tax, even when in Spanish waters? We go to Gibraltar, so can I assume that NO tax will be charged during the entire cruise, even when we're in Spain? Also, the original poster mentioned a 10% tax on liquor. I'm curious whether the letter in Oceania's response is old, as apparently Spain recently changed its VAT rate, or if the liquor tax IS really "only" 8%!

 

Thanks again for the info!

 

Roothy,

 

My take, and my TA's opinion, on this (complicated) "clarification" is that as long as we are in Spanish waters or a Spain port -- OR any EU port for that matter -- the extra VAT applies. The days we are in a non EU port (in our case, Gibraltar and Tangier), the tax would not be applied.

 

Seems like an awful lot of bookkeeping to me, but heck -- what do I know? :confused:

 

Yes, I also noted the 8% VAT mentioned in the article; but, as you say, Spain just increased it to 10%.

 

At this point, I figure I'm aware of the added cost that may or may not be added (especially in an EU non Spanish port), but I'm still going on my cruise! :D

[turnip eater]

Our TA has spoken to 'O', we are on a cruise departing from Monte Carlo! then sailing onto Spain, Portugal. France, finally arriving in Southampton, England......all EU. We have purchased the drinks package before boarding, therefore, according to 'O' customer services, we will not have to pay extra charges......Let's see what happens.

Edited June 26, 2014 by turnip eater

[2tsquared]

Our TA has spoken to 'O', we are on a cruise departing from Monte Carlo! then sailing onto Spain, Portugal. France, finally arriving in Southampton, England......all EU. We have purchased the drinks package before boarding, therefore, according to 'O' customer services, we will not have to pay extra charges......Let's see what happens.

 

Yup -- that's how my TA and I "read" the response.

[turnip eater]

to go a little OT.....I understood that (one of) the reasons ships' shops were not opened when the ship was in port, was to avoid having to charge local taxes...and reprice goods. Therefore I expect the shops to be closed in Spanish waters, unless the ships sail further from the Spanish coast;)

 

Although vat is payable throughout Europe, I've never been on a cruise where other EU countries charge vat when ships are cruising in their waters

[LHT28]

to go a little OT.....I understood that (one of) the reasons ships' shops were not opened when the ship was in port, was to avoid having to charge local taxes...and reprice goods. Therefore I expect the shops to be closed in Spanish waters, unless the ships sail further from the Spanish coast;)

 

Although vat is payable throughout Europe, I've never been on a cruise where other EU countries charge vat when ships are cruising in their waters

 

The ship's shops are always closed when in port along with the casinos ..has been this way since my 1st cruise back in 1974

[ohmark]

Yes, that's exactly what he said:

i.e. you started in Spain and you never left the EU

 

"He" said "starts and ends in Spain."

[JimandStan]

"He" said "starts and ends in Spain."

 

If you start in Spain and don't leave the EU or stop in an EU Country which has a tax law which supersedes Spain's law then you pay the Tax.

 

If Spanish Ports are interim stops on your Cruise, then you pay the Tax, only while the ship is under Spanish jurisdiction.

[CintiPam]

If you start in Spain and don't leave the EU or stop in an EU Country which has a tax law which supersedes Spain's law then you pay the Tax.

 

If Spanish Ports are interim stops on your Cruise, then you pay the Tax, only while the ship is under Spanish jurisdiction.

 

I thought about reposting your post #22 above over the past few days, but happy you did it. How clear can you be? Good for you for persisting!:)

[Paulchili]

I thought about reposting your post #22 above over the past few days, but happy you did it. How clear can you be? Good for you for persisting!:)

 

Actually, he could have been clearer by stating this:

If you start in Spain and don't leave the EU or DO NOT stop in an EU Country which has a tax law which supersedes Spain's law then you pay the Tax.

instead of this:

If you start in Spain and don't leave the EU or stop in an EU Country which has a tax law which supersedes Spain's law then you pay the Tax.

because the latter could be interpreted as either/or:

If you start in Spain and don't leave the EU or (IF YOU) stop in an EU Country which has a tax law which supersedes Spain's law then you pay the Tax.

:D

Edited June 27, 2014 by Paulchili

[Joanna waters]

What does the tax apply to?liquor and anything you purchase?

 

 

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[JimandStan]

What does the tax apply to?liquor and anything you purchase?

 

 

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The details are spelled out here:

http://www.kpmg.com/global/en/issuesandinsights/articlespublications/vat-gst-essentials/pages/spain.aspx

[lilybug]

This has helped us decide on the Bev. Pkg. An afternoon beer or two and a few glasses of a nice wine in the evening - add all the taxes and gratuities and we'll, package is a good deal. Sorry we can't rip on board and use our obc towards it.

 

 

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[Aloha 1]

At the risk of beating this issue to death ( or getting beaten :D), help me cut thru the legalize for this scenario:

 

I board Riviera in Barcelona. We are in port for one day and never touch Spanish waters again. We visit several other EU countries ( Malta, Greece). The cruise goes to Israel and Turkey ( non EU) and ends in Turkey (non EU). Given that, is this correct?:

 

I pay the Spanish VAT tax on any purchases done on board the day we are in Barcelona.

I pay the Spanish VAT tax for any purchases at each EU port we stop at.

I do NOT pay the Spanish VAT tax while in International waters.

I stop paying the Spanish VAT tax when we stop visiting EU ports, i.e.: when we stop in Israel.

 

OR

 

I pay the Spanish VAT tax while in Barcelona BUT after sailing out, the tax ends because the cruise will finish in non EU waters.

 

I confess to having to spell correct an overwhelming desire to write "Spanish Inquisition" instead of VAT but then no one expects the Spanish Inquisition!!

[Aloha 1]

To add to the above, if you purchase the beverage package while in International waters, it would be VAT free, correct?

[roothy123]

I'm reasonably sure, from what I've read, that you will not be charged any Spanish VAT tax if you purchase the package in international waters (and I would guess also if you pre-purchase from home, assuming that's possible)! After that, I'm still confused, so I can't answer - and hope someone else will! The part that is still unclear to me is whether a cruise has to start and end in a Spanish port or just start in a Spanish port for Spain to want the tax for the whole cruise! I looked at the Tom S. article relayed to a poster by Oceania; I looked at the KPMG document, and finally gave up trying to understand the situation for a ship leaving from Barcelona. I'm only glad I won't be starting out in that beautiful city this time, and that we WILL be visiting Gibraltar and the Canary Islands, which means we won't be paying the tax for the whole 12 days, but only on the days we're in Spain!

 

Hopefully someone else will come on here and answer your question.

Edited July 11, 2014 by roothy123

[StanandJim]

To add to the above, if you purchase the beverage package while in International waters, it would be VAT free, correct?

 

That is correct, but remember that there is a limit to how many days days into the Cruise one may purchase a Beverage Package.

 

The exact number of days seems to fluctuate with the length of your Cruise and the whims of the front office, but please make note of the fact that buying into the Package is not an open ended proposition.

[StanandJim]

In rereading my last Post, I oversimplified the process. What I meant to say, and this is the reason that I was cautioning you about waiting too long to purchase the Beverage Package, is that:

 

If your Cruise begins in Barcelona, then the Spanish Tax will apply until such time as:

 

A) you land in an EU Country with a Tax Law which supersedes Spain's Law.

B) you land in a Free Port

C) you leave the EU, entirely

[StanandJim]