VAT?

[J441]

My daughter recently purchased the wifi package for our upcoming Symphony of the Seas cruise leaving from Barcelona. The taxes on this were almost 21%!  The app mentions a charge for Spain's Value Added Tax. Have others encountered this?  Is this typical of purchases made on ship?

[Kendall James-Vargas]

@J441 Although I haven't cruised from Barcelona before, I'm very shocked by these taxes. I find it bizarre that the taxes for Wi-Fi are that high, and I don't even think that service is taxed. From my understanding, it's usually a flat-rate service. This sounds bizarre. How was every other onboard expenditure taxed? I understand this taxation for drinks perhaps or a service that encompasses a gratuity as well, but this just sounds odd to me. This is especially bizarre for an RCL ship since the cruise line is so popular in the States. Maybe I stand corrected, but I always thought tax-free, duty-free shopping was a huge perk of shopping onboard a cruise ship!

[J441]

The only other advance purchase we made (we sail next month) is for a shore excursion through RCL. There was no tax applied to that.  That excursion is in Italy though. 

[Cruising Caribbean]

@J441 I think this taxation is unfair. Unless it's truly a government-mandated tax, this "Spain's Value Added Tax" sounds like an extra way for the cruise line to make money. Were you able to contact RCL about the reasoning behind it? I doubt you will receive a solid answer, but I'm curious to hear the line's stance on this extremely high taxation. Keep me posted on the final price post-cruise. I'm also curious to see if the cruise line ends up taxing you that high for all onboard expenditures as well.

[FJB]

I do remember the last cruise we took out of Barcelona, we were charged tax on our drinks while in the port of Barcelona and until we were in international waters. And this was even on those drinks included in the alcohol packages.  No big deal to us on a couple of adult beverages- we were grateful to be on vacation embarking on a Med cruise! 

[J441]

I spoke with an RCL representative today who said this is their standard tax rate, and it has nothing to do with Spain's VAT. So apparently any onboard purchase will be taxed over 20%. To break it down:

Wifi for 2 devices- $230.93

Tax- $48.44

Total- $279.37

Needless to say, we won't be making any more onship purchases. 

[PaulB]

It's absolutely disgusting that with the amount spent on going on these ships that they charge so much in the first instance but to add tax to that too is appalling 

[kefthecruiser]

@J441 Wow, that just sounds so illegal for RCL to call it a tax when it is not. Tax is collected by governments, not companies. I assume they didn't explain why they set the price for wifi and then add more to it? And the money grabbing continues...

[Cruising Caribbean]

@J441 I agree with @kefthecruiser, how can this even be considered tax? RCL shouldn't call it a tax if it really isn't. This high percentage is more like a user convenience fee. I have noticed taxation on things on board but I have never noticed one this steep. I think Royal Caribbean Line is really trying to get crafty to recoup the previous year's losses. I just think this "tax" is a pretty sneaky and unreasonable way to do it. As you said, guests should be really cautious now about what they are purchasing onboard. This additional tax will make your bill rack up pretty quickly.

Edited May 16 by Cruising Caribbean

[3Sisters]

@J441 You just gotta love how the cruise line explicitly states the charge is for Spain's Value Added Tax, and then when you call the line says nevermind it's not that, and furthermore you have to pay it on everything. Sounds like a scam of a tax to me. Don't you think? 

[J441]

@3Sistersyes I'm not sure that the rep I spoke with was correct. I've seen in my other post on RCL blog that Spain has VAT of differing amounts depending on what is purchased, but it does actually go up to 21%!

I'm just wondering if you can avoid the VAT if you delay your purchase until you're in international waters. 

[3Sisters]

@J441 That's a good thought. I wonder if this VAT can be avoided. Customer service reps often have no idea about all of these minute details. Sometimes they just pull an answer from their behind to appease the customer on the line and move on to the next call. From what the rep told you, it seems unavoidable, but based on the nature of the tax, it would make sense that purchases in international waters would avoid this VAT. The percentage is almost a joke to me, 21% is just way too high.

[PaulB]

So it's a reason to up their prices and find a way to dupe unsuspecting customers into paying more on the pretence that it's a tax increase. If they are saying it's tax and find out it's not, then those companies should be heavily punished for that.

[3Sisters]

I think you are likely correct. This is a sneaky money-making strategy. I prefer a more blatant and honest approach. I usually do better with that, and I get pretty frustrated when cruise lines try to push upselling while onboard. When I'm casually meandering the ship, I don't want to be constantly harassed. Here and there, I'm fine with it, but I don't enjoy the constant push for sales onboard.

I do find it hard to believe that this VAT makes sense. I did some research on Spain's Value Added Tax, and I found there are lower rates for certain things related to travel and food/beverage consumption that would actually lower the traditional 21% VAT to a rate between 4-10%. The way @J441 received this taxation seems wrong. 

[PaulB]

@3Sisters yeah nobody likes the VAT in the UK. Another sly way of getting extra money out of you. 

[3Sisters]

To be honest, I didn't know that there was a VAT in the UK. What is the VAT for and what percentage is it at? What does this taxation even go towards? 

[PaulB]

Yeah, welcome to rip off Britain lol. VAT is added to most products from VAT registered businesses that turnover is more than £85k.  The rate is 20% and is an indirect tax, however it is still required to report it to the tax office. Does that differ to you @3Sisters?

[Kendall James-Vargas]

I haven't heard the phrase "rip off Britain" before! As someone who has yet to visit this region, I'm intrigued to read the exasperating rate of a 20% VAT! State and federal taxes are collected in the U.S. for practically everything but "food," but the percentages aren't as high as 20%. Does this VAT apply to food purchases? 

[PaulB]

There is a TV program called rip off Britain, it's just an affectionate term that some use. The vat of 20% mainly covers goods and services.

[Kendall James-Vargas]

I will have to look that up! It sounds so very affectionate... Well, hopefully, this high rate trickles down to properly serving the people of Britain. If not, I wonder where all of this income is going. It's a significant percentage. 

[PaulB]

I never really though about how high it was, just annoyed that once you've been given a price on something, then that should be what you pay. Because the extra that the normal consumer doesn't get back, it's not the price that it should be.

[Kendall James-Vargas]

I value that perspective, and I wish I could say that's possible, but I highly doubt it. The listed prices are always subject to hidden taxes and fees. That's just become a reality for me. One exception to this is bartering at foreign artisan markets. Another reason I love cruising is getting off at the ports and finagling some deals! I love being able to bargain shop and adjust my own prices for goods. There is something so liberating and strategic about this shopping style! After just paying what I'm told at the U.S. stores every day, this is so very refreshing. Although I'm usually just buying local goods for friends and family while on vacation, I love creating my own shopping discounts like a buy 2 get 1 free! Can't beat a deal like that! Oh, and did I mention tax-free?

[PaulB]

Are the goods on board that much cheaper than American prices? Pardon my ignorance but I have never been to USA so wouldn't really know about the difference in prices.

[Cruising Caribbean]

I don't think the goods onboard cruise ships are that cheap, although there are lots of duty-free options onboard. If you get off the ship at ports of call, particularly some of my Caribbean favorites that have little localized markets with small vendors, you will see that you have the opportunity to buy goods with cash or local currency at a potentially cheaper rate, oftentimes avoiding taxes. The onboard shops are fun, but not really any cheaper than any normal U.S. shop. I do like getting some duty-free alcohol onboard my cruises though! 

[kefthecruiser]

@Cruising Caribbean I agree, goods onboard ship don't seem any cheaper than back in the states. I particularly chuckle to myself when USA made merchandise (like my buddy Jack Daniels)  is advertised as 'duty free' on board. It's also duty free in the states! So, should I buy a bottle of Jack on board and haul it all the way home to save the state sales tax? Nope, base price plus sales tax is cheaper at home. On board shopping will never be confused with Walmart.