On October 1, 2017, the Catalonian region of Spain held a referendum on independence. While the Spanish Supreme Court declared the vote unconstitutional and Spain does not recognize the result as legally binding, the vote was held and the results were that an overwhelming majority of Catalan voters expressed a clear desire to become an independent republic, separate from Spain.
Following the referendum, the “Govern de la Generalitat” (local name for the Catalonian regional government) announced that they will declare the independence of Catalonia from Spain. While no one expects Spain to immediately accept succession, it’s interesting to spend a moment considering some of the VAT and compliance ramifications of such a move:
- Catalonia would become a country outside of the European Union – Catalonia would need to petition for membership if they so chose.
- The VAT of Spain would not apply – and a new local VAT would likely be enacted.
- The newly enacted Immediate Supply of Information (SII) regime would no longer apply.