In a fresh update, Norwegian Cruise Line has changed its tax payment protocols on board for guests sailing through European waters, at least for one cruise onboard Norwegian Epic.
The changes primarily focus on Value Added Tax levied on purchases made during the voyage through pre-purchased beverage packages and purchases through pre-packaged specialty dining.
Adjustments to VAT Applications
Norwegian Cruise Line has sent a letter to guests informing them of a change in the additional VAT charges that were announced some weeks ago.
In September 2023, NCL notified its guests about being forced to include VAT on beverage purchases, specialty dinner packages, and drinks obtained through beverage package purchases while cruising in Europe, especially when the voyage touches Spain and other subsequent countries on the same itinerary.
The tax was to be applied to all on-board purchases made during the time the ship sailed through Spanish waters or docked at Spanish ports. This fiscal measure extended to other European countries like France and Italy, where each country’s respective VAT rates were to be applied.
However, a recent development has seen NCL taking a guest-centric approach, particularly for its voyages touching French shores. The cruise line has graciously decided to absorb the VAT charges for those guests who had pre-purchased specialty dining and beverage packages, albeit for the French leg of the voyage.
The move comes as a relief to guests but leaves questions open for similar tax coverages in other countries.
Guest Communication and Implications
On October 7, 2023, during the October 2, 2023, sailing for Norwegian Epic, NCL sent out a letter to its guests.
The letter states: “After careful consideration, we have decided to remove French VAT from qualifying beverage and dining consumption for all guests who pre-purchased these packages for Norwegian Epic’s October 2, 2023, sailing.”
Guests who have already paid VAT charges over all-inclusive consumptions ordered in France will receive a full VAT refund from NCL.
Although the letter states the removal of French VAT from purchases made through beverage and dining packages, it only applies to those guests who pre-purchased these packages. Guests who purchased packages while onboard are not exempt.
The itinerary includes visits to Marseille and Cannes, now exempted from VAT payments, and visits to Barcelona and Palma De Mallorca, Spain, Naples, Civitavecchia, and Livorno, Italy. The VAT charges would likely still be levied for the ports in Spain and Italy.
While guests onboard will be happy that they won’t be charged VAT over the drinks they order in France, it’s still only two days out of the cruise. Adding to that, the confusion that has been building over why these taxes are levied and will now include why and when the taxes are and are not included.
The 155,873 gross tons Norwegian Epic will remain in Europe longer than usual, with the ship only sailing its Transatlantic voyage on December 1. This cruise will sail from Civitavecchia to Naples and Livorno, Italy; Marseille, France; Barcelona and Cadiz, Spain; Lisbon, Portugal; Ponta Delgada, Azores, and arriving in its winter homeport of Port Canaveral, Florida, on December 17.
From Port Canaveral, Norwegian Epic will sail seven-day cruises to the eastern and western Caribbean, including calls to Great Stirrup Cay, Cozumel, Ocho Rios, San Juan, St. Thomas, and more.
Is Europe Now Turning Against Cruises?
The announcement of the VAT application to pre-purchased packages echoed a broader change in Spain and potentially other European countries in how cruise tourism is regulated.
The addition of VAT is not a new thing, and guests have had VAT added to onboard purchases while in Europe for decades. However, the situation becomes more complex when it comes to purchases made outside of Europe.
Generally, pre-cruise purchases are exempt from VAT, especially when these purchases are made from the US for European cruises. This exemption applies to drinks, internet, and specialty dining packages purchased from home.
This could be why NCL removed the French charges, as the French government does not have the same policy as the Spanish. The original aim of the Spanish government was to align the tax payments of guests on board with those vacationing ashore.