Guaranteed to Stay

The Spanish government has announced that it will pass a law guaranteeing the rights of British residents in Spain in the event of a no deal Brexit.

As the Brexit saga continues without a clear conclusion, and with the clock ticking down to 29th March, Spain has followed the lead of several other EU countries and stated its commitment to allowing British citizens who are currently living in Spain to stay.

Government spokesperson Isabel Celaá offered what she described as “a clear message of calm” as she announced that Pedro Sánchez’s government has prepared “legal, logistical and informational measures” that will address the negative effects of Britain leaving the EU without a deal.

She affirmed that Spain was following the EU’s guidelines following the approval of Theresa May’s withdrawal agreement on 13th December last year and “is prepared for any scenario.”

“Our principal aims are to protect the rights of Spaniards in the UK, of UK citizens in Spain and to keep channels for goods and merchandise open,” Celaá confirmed.

The proposed law, which will be presented to parliament in February and is unlikely to be challenged by opposition parties, will guarantee the rights of registered British residents to remain in Spain, as well as their access to health services and recognition of qualifications.
However, these guarantees will only be offered to British nationals who are fully registered in Spain with the relevant residency document. For non-residents the situation remains unclear. The British Embassy has urged all UK expats to ensure their documentation is fully in order before March 29th, and drivers have also been advised to exchange their passports for Spanish ones before that date.

The effect of a no deal exit would be that all UK nationals would instantly become “third country” nationals on the morning of 1st April. The withdrawal agreement that was rejected by UK’s parliament on January 14th included a transition period that would allow this process to be managed over a period of time up to January 2020.

Sooner or later, however, British residents will see changes after Brexit. Current green residency cards or certificates are only issued to EU or EEA (European Economic Area nationals) and will have to be replaced by new paperwork. Several other aspects of paperwork are also certain to change.

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Canarian Demands
The Canarian Government responded to Spain’s announcement on no-deal contingency measures with a plea to make the interests of the Canary islands a priority.

The regional government is deeply concerned about the status of British residents on the islands, as well as the effect that a no deal Brexit could have on the tourism and grocery export sector.

Pedro Ortega, Canarian Councillor for the Economy, Commerce and Industry, commented after the UK parliament rejected Theresa May’s withdrawal agreement, saying “We need to prepare for a negative scenario. The chances of a chaotic exit have increased, and we require contingency plans for this eventuality.”

Ortega has demanded that the Spanish government reinforce customs staff, which will be necessary to deal with British tourists who suddenly become “third country” nationals. He also stated that he would demand that the rights of 25,000 Canarians in the UK be guaranteed, along with those of thousands of British residents in the Canaries.

Ortega also asked the government to ensure the continued operation of the Iberia airline, which is majority-owned by a UK company, and to consider compensation for the Canarian tomato industry, which sends 40% of its product to the UK.

Brit VAT Bonus
One of the few advantages of Brexit may be the return of duty free, after the Canarian Government announced that British holidaymakers will be able to reclaim VAT on souvenirs and luxury goods.

The Canarian tax authorities are planning the measure to help make up for the reduced spending capacity that they predict British tourists will have following Brexit. They forecast that the Sterling will lose value, discouraging Brits from holidaying in the Canaries or spending money while they’re here. Tax free shopping, it is hoped, will attract tourists and shopping.

Non-EU citizens can already reclaim VAT in larger department stores and airport shops (the majority of these buyers in the Canaries are Russian), but the inclusion of British tourists will mean new procedures will be introduced. These could include opening special offices where tourists can reclaim VAT.

New Years’ VAT Gift
While the duty free VAT exemption will only apply to non-resident British tourists, expats are also likely to benefit from the Canarian Government’s decision to cut IGIC (VAT) rates from January 1st this year.

The general rate of VAT, which applies to a wide range of products including electrical items, restaurant meals, books and magazines and toys, was reduced from 7% to 6.5%. At the same time the 3% VAT rate that applies to processed food items such as pasta, oils and certain breads was abolished entirely.

VAT on electricity was also abolished, and an exemption was granted to social services such as home helps and day centre and residency costs.

Income tax rates have been reduced by 0.5% for the two lowest bands, and the €50 tariff for the newly registered self-employed will be extended to two years (it’s one year in the rest of Spain).

Canarian PP President, Asier Antona, said “our financial policies will put more money in the hands of families and less in the coffers of the government. The left suffocates citizens with tax rises while we bring them down.”

However, few have any doubt that the measure is also an electoral sweetener given that the elections for the Canarian Government will take place this May 29th.