Trump Plans Tax Crackdown on US-Based Cruise Operators Over Offshore Registration

Newly confirmed US Commerce Secretary Howard Lutnick has announced that President Donald Trump will push for a crackdown on cruise operators registered offshore but headquartered in the United States.

Speaking on a media, Lutnick claimed that major cruise lines, including Royal Caribbean, Norwegian Cruise Line (NCL), and Carnival Corporation, avoid paying taxes in the US by registering their ships in foreign countries with lenient tax laws.

Despite being headquartered in Miami, Florida, the top three US-based cruise lines incorporate their ships offshore:

Under current regulations outlined by the US Internal Revenue Service (IRS), foreign-flagged cruise ships operating in international waters are generally exempt from US corporate income tax, provided they do not generate revenue primarily from US domestic routes.

His remarks led to an immediate stock decline for Royal Caribbean, Norwegian Cruise Line, and Carnival Corporation.

According to data from the US Maritime Administration (MARAD), cruise lines contribute significantly to the US economy through port fees, tourism revenue, and employment, despite their offshore registrations.

Any policy changes could increase operating costs, potentially affecting pricing and job markets within the industry.