VAT confusion ahead for Ventura

There’s going to be some head-scratching when passengers on P&O’s Mediterranean fly-cruises aboard Ventura this summer get their final bills. But it will be nothing to the hand-wringing in the accounts department which has to wrestle with Europe’s complex tax regulations.
VAT – or IVA in Spanish – will be payable on certain items like drinks from the bar, restaurant reservations, pictures from the photo gallery and items from the on-board shops.
Pity the poor P&O employee who has had to compile the comprehensive guide which has been published among the cruise line’s “Your Questions Answered” section. I hope he, or she, has got their facts right, because I can see this causing more problems among passengers than the automatic gratuities added to shipboard accounts.
The rates of tax payable depend on the nature of the spend, and whether the cruise begins in Spain or Italy. Details will be provided to passengers prior to departure, and will be repeated in the ship’s daily newspaper.
A 10 per cent levy will be added to all bar purchases, restaurant cover charges and room service charges when the ship is in Spanish waters.
Duty at the Spanish rate of 21 per cent is payable on shop purchases, photo gallery, and spa products – but not spa treatments – when the cruise starts from a Spanish port.
Tax at 22 per cent will be due on shop, gallery and spa purchases (but not spa treatments) when the cruise starts from an Italian port.
On one cruise, the rate will be at the Spanish 21 per cent during the first seven days, and at Italian 22 per cent for the second week. To complicate matters further, no VAT is payable during a number of cruises which visit the Montenegran port of Kotor, and therefore leave the European Union temporarily.
Price tickets will show the cost without the tax, which will then be added to the bill. Just as on flights within the EU, passengers will not be able to purchase duty-free alcohol or tobacco to take home.
It’s possible to avoid the duty by purchasing items in advance. For example, the 21 per cent tax would not be levied on a reservation for Ventura’s White Room restaurant if the reservation was made and paid for before embarkation. However, any drinks ordered with the meal would be subject to 10 per cent tax.
The situation is not new. I have seen it cause confusion on cruises operated by other lines. Which is why many of them try to schedule a non-EU port into their itineraries. But with the entry of more countries such as Croatia into the Union, the options are becoming limited.
At the foot of P&O’s page of advice – which itemises which cruise is subject to what rate of tax – there is a plaintive question: “Was this helpful to you?” I think they are being optimistic.