Any foreign Tax (VAT) experts around ?

coupleuk

Im not holding out much hope here but thought it worth a post.

A few weeks ago, we went on a Med cruise.

The ship was based out of Malaga for the summer season and visited Valencia, 2 ports in Italy and 1 port in France.

Throughout the cruise, bar prices included the typical 15% gratuity which is fine (prefer it to be zero but there you go).

However, throughout the cruise - including in Italy and France - Spanish IVA at 8% was also added to the prices.

Surely if the ship was in Italy, they shouldnt be charging Spanish taxes?

Do cruises out of Southampton charge 20% VAT on top of drinks prices?

Dont get me wrong, I know we're fortunate to be cruising but it just doesnt seem correct to have this 8% IVA added when not in Spanish waters.

Anyone have any info?

phatbear

No info as such but an alternative way of looking at it.

If you flew from london to perth would you expect the prices of onboard items to change as you entered each countries international airspace due to the differing taxes in each country?

coupleuk

Fair point I guess.

The thing that gets me is that onboard prices are in USD and they don't change them when the ship comes to Europe - so, they already have US tax included.

It just seems strange that they then add Spanish Tax on top.

And frustrating that "both" taxes are payable when neither in the US or Spain.

Im not looking to take Royal Caribbean to court :eek: but am just curious to understand it all.

Enterprise_1701C

Just because the prices are in USD does not mean they have US tax included, US tax is normally applied AFTER purchase as it is different state to state. It is just a way of making life easier for staff, and as it sailed out of Malaga they probably have to account to the Spanish government for all sales, expecially if the cruise ended in Spain too. Imagine the customs forms!

Voyager2002

It seems that the ship remained within the EU throughout the cruise. So the situation would have been a bit like a journey from one EU place to another, in which case no duty-free sales are permitted.

coupleuk

All points I can accept.

BUT, why do cruises which sail out of Southampton (to other European ports) not add 20% VAT to the drinks prices?

Owain_Moneysaver

coupleuk wrote: »

All points I can accept.

BUT, why do cruises which sail out of Southampton (to other European ports) not add 20% VAT to the drinks prices?

Because under UK law all prices to consumers must be displayed including VAT.

This is not a difference in how items are taxed, it is a difference in how prices are displayed.

coupleuk

Owain wrote:

Because under UK law all prices to consumers must be displayed including VAT.

This is not a difference in how items are taxed, it is a difference in how prices are displayed.

So, rather than print some new price menus for the bars (low cost), the cruise line is just going to absorb the 20% VAT into its existing price (huge cost).

Perhaps ships sailing out of the UK don't get charged the VAT by the UK Govt but those sailing out of Spain (inc going to other EU countries) do get charged by the Spanish Govt.

That doesnt sound correct either as surely all EU Countries should be operating by the same rules.

Im not trying to get into an argument on this but I am curious to know why the difference exists - have you any idea how much my wife drinks on a cruise. :rotfl:

Owain_Moneysaver

coupleuk wrote: »

So, rather than print some new price menus for the bars (low cost), the cruise line is just going to absorb the 20% VAT into its existing price (huge cost).

No.

UK Price of drink £2 + 20% VAT = £2.40 on menu = £2.40 to pay.

Spanish price of drink = £2.40 on menu + 8% VAT = £2.59 to pay.

The cruise makes 40p per drink extra profit charging the Spanish way. Nothing says that two cruises have to charge the same for drinks.

coupleuk

No

The drinks menu is priced in USD and is the same worldwide.

Except for the added Spanish IVA even when not in Spanish waters.

Try again.

zerog

coupleuk wrote: »

No

The drinks menu is priced in USD and is the same worldwide.

Except for the added Spanish IVA even when not in Spanish waters.

Try again.

You need to try again as you haven't provided proof of how VAT on the same cruise from the UK would work.