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

[KeithJenner]

1 hour ago, steamboats said:

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...

Obviously rules can vary between companies, but this is certainly the correct application of the rules in some countries.

 

In the UK, for example, you have to charge VAT on a service charge if it is mandatory (as in this case). However, it should be charged at the same rate as the goods supplied, so they may even be undercharging the VAT.

 

The employee paying Income Tax on the amount doesn't make any difference. All workers pay Income Tax on the wages that they are paid and VAT is charged on the added value due to the work that they do.

[DCGuy64]

1 hour ago, BunnyHutt said:

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. 😉

@BunnyHutt is the one with the correct answer here. EVERYBODY pays for drinks, yes, even those who've prepaid by either buying a standalone drink package beforehand, by buying it onboard, or (as I suspect many people do) by having it included in the Free at Sea (FAS) promotion, which we all know NCL offers all of the time. Before NCL, we cruised with Carnival, Royal Caribbean, and Costa, and each time, we purchased a drinks package separate from the cabin. And we had to pay gratuity at the time of purchase. Those drinks were never free, they were paid in advance. Same with FAS: I don't understand why some people keep falling back to this argument that their drinks cost nothing and therefore aren't subject to taxes. THEY'RE NOT FREE AND THEY NEVER HAVE BEEN. They were prepaid through a package, thus they have a value, and therefore, they can be subject to VAT, end of story.

[yakcruiser]

Their countries, their tax laws. And I guarantee you somewhere in the contract you signed it gives NCL the right to pass on the cost to the customer. Could NCL be more transparent? Maybe but they are not transparent about a lot of things. And I can't see this ruining anybody vacation. It didn't ruin mine when I paid an extra 52 cents a couple of times for my Starbucks drink.

[DCGuy64]

https://www.ncl.com/about/terms-and-conditions/promotions

From this page, I see the following under the paragraph entitled:

Unlimited Open Bar Package (Open Bar)

"Guest's check may reflect applicable VAT and/or taxes for certain ports or itineraries."

 

Which means that if you bought the package, you agreed to these (and other) terms.

[reveur15]

1 hour ago, yakcruiser said:

And I can't see this ruining anybody vacation. It didn't ruin mine when I paid an extra 52 cents a couple of times for my Starbucks drink.

Yes they have the right to charge any VAT and yes it is in the contract and i agreed to it,

 

BUT While in a regular cruise my bill is usually 0$,

The one I booked for 2024 MED in all EU countries for 11 days could cost me more than 800$ additional VAT If the VAT is 20% plus 10% like some told us ! 😱

Our usual included 'FREE' drinks per day value for 2 people with P+ are :

• 6 glass wine @ 20 = 120$ (1 at lunch 2 at dinner each)
• 3 beers @ 10 = 30$ (2 me 1 DH)
• 2 bottle water @ 7 = 14$ (1 each)
• 2 strabuck coffee @ 5 = 10$ (1 each)
• 2 fresh juice @ 3 = 6$ (1 each)

Total 'value' per day = 180$ * 11 days = 1980$

PLUS 5 dining package EACH @ 75$ value = 750$ if VAT applies on this also

Total 2730$ = VAT 20% = 546$ + VAT 10% = 273$ = TOTAL VAT could be $819 for 11 days for 2 people !!!

It is not a matter of only a few cents !

WIll I really have this bill ? Probably. Will it ruin my holiday ? Enough to at least consider cancel the cruise ! 

OH and will they start charge VAT on shore excursion soon ??? I have 1200$ shorex booked...

😭

 

Edited October 3, 2023 by reveur15

[KeithJenner]

4 minutes ago, reveur15 said:

Total 2730$ = VAT 20% = 546$ + VAT 10% = 273$ = TOTAL VAT could be $819 for 11 days for 2 people !!!

 

It isn’t quite that bad. The VAT is 20% on the cost of the drinks plus 10% on the service charge of 20%. This totals 22%, so if your cost is correct then the VAT would be $600.60

[jvd1971]

I don’t understand it anymore. Just get a picture of the bill after eating in Cagney’s steakhouse. No tax added!!

Edited October 3, 2023 by jvd1971

[reveur15]

33 minutes ago, KeithJenner said:

It isn’t quite that bad. The VAT is 20% on the cost of the drinks plus 10% on the service charge of 20%. This totals 22%, so if your cost is correct then the VAT would be $600.60

Thank you, it is good news !

5 minutes ago, jvd1971 said:

I don’t understand it anymore. Just get a picture of the bill after eating in Cagney’s steakhouse. No tax added!!

This is good news if no VAT on dining package !

[reveur15]

11 minutes ago, jvd1971 said:

I don’t understand it anymore. Just get a picture of the bill after eating in Cagney’s steakhouse. No tax added!!

And NO UPCHARGE for the Porterhouse ?  It's your lucky day !🤑

[BunnyHutt]

1 hour ago, reveur15 said:

Yes they have the right to charge any VAT and yes it is in the contract and i agreed to it,

 

BUT While in a regular cruise my bill is usually 0$,

The one I booked for 2024 MED in all EU countries for 11 days could cost me more than 800$ additional VAT If the VAT is 20% plus 10% like some told us ! 😱

Our usual included 'FREE' drinks per day value for 2 people with P+ are :

• 6 glass wine @ 20 = 120$ (1 at lunch 2 at dinner each)
• 3 beers @ 10 = 30$ (2 me 1 DH)
• 2 bottle water @ 7 = 14$ (1 each)
• 2 strabuck coffee @ 5 = 10$ (1 each)
• 2 fresh juice @ 3 = 6$ (1 each)

Total 'value' per day = 180$ * 11 days = 1980$

PLUS 5 dining package EACH @ 75$ value = 750$ if VAT applies on this also

Total 2730$ = VAT 20% = 546$ + VAT 10% = 273$ = TOTAL VAT could be $819 for 11 days for 2 people !!!

It is not a matter of only a few cents !

WIll I really have this bill ? Probably. Will it ruin my holiday ? Enough to at least consider cancel the cruise ! 

OH and will they start charge VAT on shore excursion soon ??? I have 1200$ shorex booked...

😭

 

$7 for a bottle of water?? 😳

 

See, now you’re making the *choice* to consume this much in order to justify the cost of the premium plus beverage package. If you forgo that and stick with less expensive wine, regular juice, standard coffee and water in reusable containers (or even having water delivered to stateroom ahead of time if you don’t want to carry your own), not only do you save the added cost of the fancy drink package over what comes with FAS but your tax liability drops substantially. 
 

But at least you are informed and can plan accordingly. 🙂

[Back to school]

56 minutes ago, reveur15 said:

And NO UPCHARGE for the Porterhouse ?  It's your lucky day !🤑

Porterhouse, no supplement, current menu Bliss!  Yay.

[steamboats]

12 hours ago, KeithJenner said:

In the UK, for example, you have to charge VAT on a service charge if it is mandatory (as in this case). However, it should be charged at the same rate as the goods supplied, so they may even be undercharging the VAT.

 

There are no real mandatory service charges in the EU countries. Spain doesn´t have any. In Italy you may count the "Coperto" as a mandatory service charge but that also covers bread, placemat, tablecloth, silverware ... (and is a part of the invoice items and therefore charged VAT). But it´s up to the restaurant if they charge a Coperto and how much (something between 1.50 and 5 Euro - has to be written in the menu). In Croatia some restaurants have a fixed service charge but also there it´s not mandatory for all restaurants.

 

steamboats

[steamboats]

9 hours ago, reveur15 said:

Thank you, it is good news !

This is good news if no VAT on dining package !

 

The inconsistency... 

 

steamboats

[KeithJenner]

3 minutes ago, steamboats said:

 

There are no real mandatory service charges in the EU countries. Spain doesn´t have any. In Italy you may count the "Coperto" as a mandatory service charge but that also covers bread, placemat, tablecloth, silverware ... (and is a part of the invoice items and therefore charged VAT). But it´s up to the restaurant if they charge a Coperto and how much (something between 1.50 and 5 Euro - has to be written in the menu). In Croatia some restaurants have a fixed service charge but also there it´s not mandatory for all restaurants.

 

steamboats

I mean if the service charge is mandatory for the customer to pay. With beverages on NCL they automatically charge the 20% service charge on the drinks and the customer can’t opt out of that. By UK law this would mean that VAT has to be charged on the service charge.

 

Of course the customer isn’t actually paying that service charge because it is included in the package, but then we are going back to the original argument as to whether any of it is VATable. In my view, if the drinks are then so is the service charge (if the rules in this are the same in France as the UK).

[steamboats]

@KeithJenner the interesting part is that they haven´t charged the VAT for the drinks or even the service charge until recently (for those who have the package). The VAT is being charged for more than 10 years for single bought drinks. But even there the service charge wasn´t part of the VAT.

 

steamboats

[graphicguy]

Still debating this?

 

I’ve come to the conclusion that many of you should not cruise or stay in hotels.

 

Whether it’s the VAT (visible or not visible), resort fees at a hotel, city tax, etc, etc…we all pay it (them).

 

Whether you want to or not is a different story.  

 

But, if you DON’T want to, don’t get drinks on your cruise.  At least on NCL, it’s visible.  On other cruise lines, it’s “baked into”’the drink package cost, where you may not even see it. 

 

Or, only sail to/from ports that do not require you to pay taxes while docked or in their territorial waters.

 

If you still want to protest it, contact Spain’s Tourism Offices and let them know your feelings!

Edited October 4, 2023 by graphicguy

[KeithJenner]

7 minutes ago, steamboats said:

@KeithJenner the interesting part is that they haven´t charged the VAT for the drinks or even the service charge until recently (for those who have the package). The VAT is being charged for more than 10 years for single bought drinks. But even there the service charge wasn´t part of the VAT.

 

steamboats

Agreed.

 

I wonder whether this is due to a difference in rules between countries.

 

Previously the VAT charged has mainly been by Spain, whereas this on (I believe although the threads are getting a bit confused in my mind) is from France. Maybe in France you have to charge the VAT on the service charge but you don’t in Spain.

 

Im speculating now though.

[KeithJenner]

2 minutes ago, graphicguy said:

Still debating this?

 

I’ve come to the conclusion that many of you should not cruise or stay in hotels.

 

Whether it’s the VAT (visible or not visible), resort fees at a hotel, city tax, etc, etc…we all pay it (them).

 

Whether you want to or not is a different story.  

 

But, if you DON’T want to, don’t get drinks on your cruise.  At least on NCL, it’s visible.  On other cruise lines, it’s “baked into”’the drink package cost, where you may not even see it.0

 

If you still want to protest it, contact Spain’s Tourism Offices and let them know your feelings!

Yes, we are still discussing a subject relating to NCL on a NCL forum. Who’d have thought it. 🙂

 

I will continue to discuss this, and to cruise and pay the tax as necessary thanks.

 

If you don’t like the discussion then maybe you should just move on to one you like better.

[graphicguy]

2 minutes ago, KeithJenner said:

Yes, we are still discussing a subject relating to NCL on a NCL forum. Who’d have thought it. 🙂

 

I will continue to discuss this, and to cruise and pay the tax as necessary thanks.

 

If you don’t like the discussion then maybe you should just move on to one you like better.

OK…

 

After 6 pages?

 

Conclusion is?

[KeithJenner]

7 minutes ago, graphicguy said:

OK…

 

After 6 pages?

 

Conclusion is?

Does there need to be a conclusion? We are just discussing.

 

Honestly, if you don’t like the discussion then just move on.

Edited October 4, 2023 by KeithJenner

[graphicguy]

26 minutes ago, KeithJenner said:

Does there need to be a conclusion? We are just discussing.

 

Honestly, if you don’t like the discussion then just move on.

 Very nice!

[KeithJenner]

50 minutes ago, graphicguy said:

 Very nice!

?

 

Dunno what that response is supposed to mean.

[DCGuy64]

I can't count the number of times I've read on Cruise Critic statements like "I think people should be paid a living wage" and "I'm OK paying more if it means people are properly compensated." And yet, it seems when the reality sets in on what paying people more actually costs them, people balk at it. Be careful what you wish for. Did you think all of that "I'm OK paying more" wasn't actually going to cost you anything? Like @graphicguy says, it sounds like some people shouldn't cruise at all, or perhaps cruise less frequently. If a VAT is going to be a "make it or break it" item for you, then simply take one cruise a year instead of two, etc. Or drop the Premium+, FAS Plus, etc. Plenty of ways to budget for this, trust me.

[RD64]

My two cents….

 

NCL has been having problems since the Spring - first with Greece and then Canada - with regards to not being able to sell alcohol, unless it was part of a drink package. Canada I believe was certain bars only, etc.

 

As it seems these problems are pacific to NCL, it would in my opinion - have to do with NCL paying their fair share to the appropriate govt agencies.

 

Now everything is VAT and there seems to be a lot of confusion and conflicting information. I do agree that NCL has the responsibility to tell passengers ahead of time. For now it is what it is. The VAT is never going away. What I completely disagree on is the VAT being charged on the gratuity - at the very least, NCL should be absorbing this amount.

 

For those of you cruising next year, there is no point in getting upset about it at this point in time. The situation can completely change by then. If Spain is charging it now, certainly other countries will see the monetary potential. Will this lead to higher fares moving forward so as to not upset potential passengers? Will the VAT become an additional line item on the drink package? Nobody knows with any certainty. The only thing that is certain is that the VAT must be paid by somebody. Economics 101 - Day 1 - There Is No Such Thing As A Free Lunch.

 

For those who have never travelled to Europe before, the VAT % is always stated at the bottom of the amount. The VAT is included in the price of what you are purchasing, and it is not necessarily called VAT. In Italy it is called IVA.

[DCGuy64]

17 minutes ago, RD64 said:

As it seems these problems are pacific to NCL, it would in my opinion - have to do with NCL paying their fair share to the appropriate govt agencies.

I think maybe you meant to say "specific" to NCL, but that is not accurate. Someone who sailed with Celebrity reported also being charged VAT. I agree on the whole with your assessment of things, there's no getting around VAT. Somehow or other, it's going to get paid.