Bahamas to tax private islands

[Baron Barracuda]

Government of the Bahamas plans to extend their value added tax (vat) to cruise line private islands effective 3/1/24 according to attached article in The Tribune.  No idea of potential impact on Coco Cay but Royal will certainly look to pass tax on to passengers.

 

Private cruise islands set for VAT reform hit | The Tribune (tribune242.com)

[soremekun]

So, 10% VAT on drinks obtained via Diamond (or higher) allowance or beverage package?  Or, since the beverage is not "sold", it's exempt?

 

They state they don't know how much money expanding VAT to the private islands will generate but I think it will be significant income for the government.

 

Background music to play while reading the article 

 

 

Edited February 8 by soremekun

[nelblu]

4 hours ago, Baron Barracuda said:

Government of the Bahamas plans to extend their value added tax (vat) to cruise line private islands effective 3/1/24 according to attached article in The Tribune.  No idea of potential impact on Coco Cay but Royal will certainly look to pass tax on to passengers.

 

Private cruise islands set for VAT reform hit | The Tribune (tribune242.com)

Already pay taxes on the beach beds and cabanas, unless they are going to tax dining (buffets), excursions, loungers and umbrellas, etc.  The Bahamian govt. has already increased their portion of the T&F as January 1.

 

 

Edited February 8 by nelblu

[not-enough-cruising]

VAT has been charged on Coco Cay for some time now. 

[LeeW]

Yup.  Old news.

[nelblu]

5 hours ago, not-enough-cruising said:

VAT has been charged on Coco Cay for some time now. 

I know, then what is new with this article.  It reads as though there are certain activities that are not presently taxed.

[Mum2Mercury]

I noted that drinks on Coco Cay were about $1 more than drinks on the ship.  This must be why.  

 

I don't understand why Royal wants to sail so heavily to the Bahamas -- well, yeah, I do:  location.  When we last visited, we did not feel safe being herded through the bottleneck that exists between the dock and the island.  Too crowded, people pushing -- if one person had fallen, it could've been a disaster.  If anyone had needed medical attention, no one could've reached him.  

 

Except for Coco Cay, it's not a great island stop.  

Edited February 8 by Mum2Mercury

[nelblu]

9 minutes ago, Mum2Mercury said:

I noted that drinks on Coco Cay were about $1 more than drinks on the ship.  This must be why.  

 

I don't understand why Royal wants to sail so heavily to the Bahamas -- well, yeah, I do:  location.  When we last visited, we did not feel safe being herded through the bottleneck that exists between the dock and the island.  Too crowded, people pushing -- if one person had fallen, it could've been a disaster.  If anyone had needed medical attention, no one could've reached him.  

 

Except for Coco Cay, it's not a great island stop.  

I agree I've been to Nassau so many times.  Unfortunately, when someone sails for Bayonne, we have no choice.   Never felt the difference in the drink prices as I use my allowed D+ free drinks.

 

The bottleneck occurs due to too many ships at any given time and excursions which packs the docks.

 

 

Edited February 8 by nelblu

[smokeybandit]

This is not old news. This is a brand new thing that cruise lines just got sideswiped with. There is a VAT on on-island purchases now, yes, but this would seek to expand that VAT to pre-purchased excursions and even the "included" cruise-line provided food on the a private island.

 

I would think the cruise lines are powerful enough to call their bluff.

[nelblu]

1 hour ago, smokeybandit said:

This is not old news. This is a brand new thing that cruise lines just got sideswiped with. There is a VAT on on-island purchases now, yes, but this would seek to expand that VAT to pre-purchased excursions and even the "included" cruise-line provided food on the a private island.

 

I would think the cruise lines are powerful enough to call their bluff.

That's what I pointed out in my post #3.  It's not old news because it's effective March 1 and it seems to cover things that are provided on the island which I'm assuming were not subject to VAT prior to this ruling.

 

Unfortunately, the cruise lines have a lot of $s invested in these private islands and ultimately, the consumers (us) are going to get screwed.

[neverbeenhere]

No one is getting screwed, the country has removed its exemption from the tax source. 
 

BTW: I don’t think the VAT will be added to that service. 

[RFerrington]

I wonder if sales on the ship (not on shore) will be subject to the new VAT similar to the way Texas taxes alcohol in port.  I almost never get off the ship anywhere in the Bahamas so a shore-based tax will not be an issue for us….but if the shipboard charges are also subject to the VAR tax (which will almost certainly be the case, IMO), then they (The Bahamas govt) may get a few shekels from me.  Not enough to be any serious problem but….

[nelblu]

13 hours ago, neverbeenhere said:

No one is getting screwed, the country has removed its exemption from the tax source. 
 

BTW: I don’t think the VAT will be added to that service. 

What was removed?

[ChittyChittyBangBang]

1 hour ago, nelblu said:

What was removed?

9 year Value Added Tax Free has been canceled March 2024.  Any product or service provided to cruise guest by any business local or otherwise has the tax added.  Hope this helps!

[nelblu]

9 minutes ago, ChittyChittyBangBang said:

9 year Value Added Tax Free has been canceled March 2024.  Any product or service provided to cruise guest by any business local or otherwise has the tax added.  Hope this helps!

No really, need specifics.  For instance, drinks purchased on CC presently has an extra $1 charged and assume it's the VAT.  Free drinks presently have no taxes, will they be subject to taxes. Specifics as examples, such as buffets, chairs and umbrellas, etc.  will the cost be imputed for VAT purposes.

[fac429]

8 minutes ago, nelblu said:

No really, need specifics.  For instance, drinks purchased on CC presently has an extra $1 charged and assume it's the VAT.  Free drinks presently have no taxes, will they be subject to taxes. Specifics as examples, such as buffets, chairs and umbrellas, etc.  will the cost be imputed for VAT purposes.

 

The article clarifies that 1) the private islands have been exempt from VAT up to now and 2) the Bahamas has not seen any records of what is being purchased on these islands and so they don't really know what will/won't be taxed.  But it sounds as though they're going to tax all the same stuff that would be taxed at, say, a beach club in Nassau (so food, drinks, chairs, excursions, day beds, etc.).  

 

Sounds like the issue isn't so much that they're adding the tax- we all know the cruise lines are going to pass those costs along to us anyway- it's that they're springing this on the cruise lines with little notice which means that the cruise lines have already sold these things months in advance without the tax priced in. It doesn't sound like they're considering an exemption for items already purchased for upcoming cruises, which will be the biggest sticking point I'm sure. 

[robmtx]

17 hours ago, smokeybandit said:

this would seek to expand that VAT to pre-purchased excursions

Pre-purchased excursions have been taxed dating back even before the pandemic. It would appear in your planner as you're making the purchase.

[smokeybandit]

They want that VAT applied to anything and everything that happens on that island.  And that includes the food RC brings from the ship that otherwise is complimentary.

[smokeybandit]

10 minutes ago, robmtx said:

Pre-purchased excursions have been taxed dating back even before the pandemic. It would appear in your planner as you're making the purchase.

Taxes, yes. But not the Bahamas VAT tax.

[robmtx]

1 minute ago, smokeybandit said:

Taxes, yes. But not the Bahamas VAT tax.

Then what did I pay here in 2022? (email from Concierge)

[smokeybandit]

2 minutes ago, robmtx said:

Then what did I pay here in 2022? (email from Concierge)

Whatever included there is not part of the VAT they want to add now.

[robmtx]

9 minutes ago, smokeybandit said:

Whatever included there is not part of the VAT they want to add now.

 

Ok if you say so. I'm no tax expert, and even less knowledgeable about Bahamian law. But I've been consistently charged 10% VAT for my pre-purchased ShoreEx items at PDCC. 

 

If anyone can explain how this impacts the current 10% tax on pre-purchases, let me know! Will it be 10% two times? Like a local island tax plus a national tax maybe?

 

[fac429]

40 minutes ago, robmtx said:

 

Ok if you say so. I'm no tax expert, and even less knowledgeable about Bahamian law. But I've been consistently charged 10% VAT for my pre-purchased ShoreEx items at PDCC. 

 

If anyone can explain how this impacts the current 10% tax on pre-purchases, let me know! Will it be 10% two times? Like a local island tax plus a national tax maybe?

 

It's definitely confusing, and I'm not sure that the information in the article is correct.  Another article I was reading said that cruise lines already collect the VAT for "on-island" purchases (like drinks) but that this would be a tax for shore excursions purchased in advance.  But that also doesn't sound right as shown by your own invoice showing that they collected the VAT on that as well.  I'm not sure if anyone- including the Bahamas, based on their own quotes in the article- actually know what will be taxed that wasn't taxed already...

[robmtx]

1 minute ago, fac429 said:

It's definitely confusing, and I'm not sure that the information in the article is correct.  Another article I was reading said that cruise lines already collect the VAT for "on-island" purchases (like drinks) but that this would be a tax for shore excursions purchased in advance.  But that also doesn't sound right as shown by your own invoice showing that they collected the VAT on that as well.  I'm not sure if anyone- including the Bahamas, based on their own quotes in the article- actually know what will be taxed that wasn't taxed already...

Yeah I even looked at another receipt for a Cabana in 2023. and same thing.

[smokeybandit]

Here's the draft guidance being discussed

 

https://inlandrevenue.finance.gov.bs/wp-content/uploads/2024/01/Guidance-on-cruise-line-operations-FINAL-DRAFT-Version-5-14-Jan-2024-B.pdf

 

And here's the old version. It references 7.5% but it since went up to 10%

 

https://inlandrevenue.finance.gov.bs/wp-content/uploads/2017/03/2017-01-01-VAT-Guidance-for-Cruise-Line-Operations.pdf

Edited February 9 by smokeybandit