I’ve read today that passengers on many of this summer’s Mediterranean fly-cruises on Ventura have received letters from P&O advising them they will have to pay Italian or Spanish VAT on some on-board purchases. Some cruises will pay Spanish VAT on drinks as well. It’s all very complex, and it’s all due to the fact that many of the cruises will not be leaving EU waters; hence, VAT will be payable.
First, here are the relevant cruises:-
- all 7-night cruises departing from Genoa;
- half of all 14-night cruises, whether departing from Genoa or Venice;
- but not 7 night cruises departing from Venice.
This is apparently because one of the destinations on the Venice to Genoa cruise is Kotor, in Montenegro, which is not a member of the EU. Since the cruise is calling at a non-EU port, that therefore means those 7-night cruises avoid on-board VAT. In contrast, the 7-night cruises from Genoa only call at ports in EU countries, so VAT will be levied. Passengers on 14-night cruises will only pay the VAT for the leg from Genoa to Venice. Arguably they ought not to pay it at all – every 14-night cruise will call at Kotor at some point – but if the on-board systems are set up to charge VAT from Genoa to Venice then I don’t suppose they can apply it only to passengers on 7-night cruises; in practice, they’ve got to apply it to all passengers.
Spanish VAT will apply because the first and last cruise of Ventura’s season will be between Malaga (after the transatlantic voyage in spring) to Genoa, and vice-versa in the autumn.
So what will VAT be charged on?
- Italian VAT (22%) will be charged on on-board purchases in the shops, photo gallery, and products bought in the spa, but not the cost of treatments;
- Spanish VAT (21%) will be levied on the same things;
- In addition, Spanish VAT at 10% will be levied on bar charges, select dining charges and room service charges when the ship is in Spanish waters;
- But there’s no mention of Italian VAT being levied on drinks or food. Sensible people, the Italians….
You can read the full details here.
Update: I ought to make it clear that passengers won’t have to pay both Spanish and Italian VAT on the same cruise. In fact, the main cruise for which Spanish VAT will be levied will be N407D, which is the cruise that departs from Malaga on 26 March, take 7 nights to get to Genoa, and then continues to Venice – on that one, Spanish VAT will be charged and not Italian VAT.