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Canary Islands IGIC calculator

The Canaries' own sales tax has seven rates and a general rate of 7 %. Enter an amount and pick yours.

Pick the rate that applies to the transaction.
Taxable base
€1,000.00
IGIC at 7 %
€70.00
Total to pay
€1,070.00
Taxable base€1,000.00
IGIC at 7 %€70.00
Total€1,070.00

The 7 % rate comes from article 51.1 of Ley 4/2012, which the Canarian parliament sets and the Spanish state does not.

Video: how to use the calculator

1

Seven rates, and the general one is a third of the mainland rate

Article 51.1 of Ley 4/2012 sets seven rates: zero, two reduced rates of 3 % and 5 %, the general rate of 7 %, two higher rates of 9.5 % and 15 %, and a special 20 % for tobacco products. The general rate applies, in the article’s own words, to anything "not subject to any of the other rates", so it is the default answer. Which specific goods fall into each one is set out in articles 52 to 61 through very long lists built on European activity-classification divisions, and that is a classification question rather than a calculation: this tool applies whichever rate you choose and the table below says what sits in each. Article 51.4 settles the timing question: the rate that applies is the one in force when the tax accrues, not the invoice date, the contract date or the payment date.

2

A zero rate is not an exemption, and that is the biggest difference

Article 52 puts bread, flour, gofio, milk, cheese, eggs and drinking water at a ZERO rate, among other things. On the mainland those same products sit at the 4 % super-reduced rate. And a zero rate is not the same as an exemption: someone selling at 0 % is still a taxable person and keeps the right to deduct the tax they were charged, while someone making an exempt supply does not. Article 59 goes further and puts electric vehicles at the zero rate, along with hybrids emitting no more than 110 grams of CO2 per kilometre, fuel-cell vehicles, and also bicycles, scooters and pedal-assisted bikes. A 30,000 € electric car pays 0 € of IGIC in the Canaries and 6,300 € of VAT on the mainland, on exactly the same invoice.

3

Shops do not charge IGIC: they pay a surcharge on imports

This is the piece that explains the whole architecture of the tax and almost nobody states it. Article 50.Uno.27 declares exempt "the supplies of goods made by retailers" and adds that those taxpayers "shall be compulsorily included in the special regime for retailers". A Canarian shop’s price therefore carries no IGIC line at all. In exchange, article 51.5 charges it a surcharge when it imports the stock, and that surcharge is exactly one tenth of the rate across all seven bands: 0.7 % on the general 7 %, 0.95 % on 9.5 %, 2 % on 20 %. Compare that with the mainland equivalence surcharge, which is 5.2 % on a 21 % rate, so nearly a quarter of the rate rather than a tenth: on a 1,000 € purchase the Canarian retailer pays 77 € in tax and surcharge together and the mainland one pays 262 €.

4

Thirty thousand euros, and below it you charge nothing

Article 109 of Ley 4/2012 places individuals established in the Canaries whose total turnover in the previous calendar year did not exceed 30,000 € inside the special regime for small traders, unless they opt out, and article 110.1 declares their supplies and services exempt from the tax. There is nothing comparable in VAT: article 88.Uno of Ley 37/1992 requires the taxable person to pass the tax on in full, so a mainland freelancer billing 25,000 € charges 21 % from the first invoice and a Canarian one on the same income charges nothing. Two details move the answer: if the activity began during the previous year, article 109.1 requires the turnover to be scaled to a full year before it is compared, and the article 109.2 waiver is TACIT, because filing the first-quarter return on time counts as opting out.

5

Buying from the mainland is importing

Article 8.1 of Ley 20/1991 defines as third territories "the Peninsula, the Balearic Islands, Ceuta, Melilla, any other European Union member state or third countries", and calls an import the entry of goods into the Canary Islands from any of them, "whatever their intended purpose or the status of the importer". Mainland Spain heads that list, alongside non-EU countries. A parcel sent from Madrid to Las Palmas is an import for IGIC purposes, whether a business or a private individual ordered it, which is why an online purchase that would carry VAT on the mainland arrives in the Canaries without it and with IGIC due on arrival. Article 51.3 closes the rule: imports are taxed at the rate for goods of the same nature, so an imported book pays what a book bought on the island pays.

6

What this calculator does not do

It does not classify products: the rate is your input and not the tool’s deduction, because deciding whether a particular good falls under article 54 or article 56 means reading lists of dozens of NACE divisions with their exceptions. It does not apply the customs-value reliefs in articles 14 and following of Ley 20/1991, which keep some small imports outside the tax. It does not handle the simplified regime of articles 64 to 66, nor the used-goods regime, nor travel agents, nor cash accounting. And it does not calculate AIEM, which is a separate Canarian tax and not an IGIC rate. Nor does it replace an adviser: if your case sits near one of the edges described here, confirm it before you invoice.

Worked example

A 1,000 € invoice at the general rate. IGIC is 70 € and the total 1,070 €. The same invoice on the mainland would carry 210 € of VAT and cost 1,210 €: 140 € more for the same purchase. If the buyer is a shop importing the stock, article 51.5 adds a 0.7 % surcharge, so 7 € more and 1,077 € in total; its mainland counterpart would pay 52 € of equivalence surcharge and 1,262 €.

Frequently asked questions

What is the general IGIC rate?
It is 7 %. Article 51.1.d) of the Canarian Ley 4/2012 sets it, and it applies to anything not covered by one of the other six rates. That is one third of the mainland general VAT rate of 21 %.
How many IGIC rates are there?
Seven: zero, a reduced 3 %, a reduced 5 %, the general 7 %, higher rates of 9.5 % and 15 %, and a special 20 %. They are listed in article 51.1 of Ley 4/2012, and articles 52 to 61 set out which goods sit in each.
Who sets the IGIC rates, Spain or the Canaries?
The Canarian parliament. Article 27 of Ley 20/1991, the Spanish state law on the tax, no longer sets any rate: it refers to articles 51 to 61 of the Canarian law, under the competence granted by the eighth additional provision of Ley 22/2009. It is the only general consumption tax in Spain whose rate the state does not decide.
Does a Canarian shop charge IGIC to its customers?
No. Article 50.Uno.27 of Ley 4/2012 exempts retailers’ supplies of goods and places them compulsorily inside their special regime. What the shop does pay is the article 51.5 retailer surcharge when it imports the stock, and that surcharge is one tenth of the rate.
At what turnover does a Canarian freelancer start charging IGIC?
An individual established in the Canaries who billed 30,000 € or less in the previous calendar year is inside the article 109 small-trader regime and their transactions are exempt under article 110.1, unless they opt out. Above that figure they charge normally. The threshold does not exist in mainland VAT.
How do you opt out of the small-trader regime?
You can do it expressly, but article 109.2 also provides for a TACIT waiver: it is taken to have happened when you file the first-quarter periodic return on time. The waiver covers all of the taxpayer’s activities, not just one.
Does buying from mainland Spain attract IGIC?
Yes, as an import. Article 8.1 of Ley 20/1991 defines the Peninsula as a third territory, alongside the Balearics, Ceuta, Melilla and the rest of the European Union, and treats the entry of goods into the Canaries from any of them as an import, whatever the status of the importer.
Does an electric car pay IGIC in the Canaries?
No. Article 59.Uno of Ley 4/2012 puts electric vehicles, fuel-cell vehicles, hybrids emitting no more than 110 grams of CO2 per kilometre, and also bicycles and scooters, at the zero rate. On 30,000 € that is 6,300 € less than the 21 % VAT the same car would pay on the mainland.
Is IGIC the same as VAT?
No. They are two different taxes with different laws, different rates and different territories. The Canary Islands sit outside the European Union’s turnover-tax harmonisation area, which is why they charge IGIC rather than VAT. Any tool offering you the Canaries as a region inside a VAT calculator is giving you a wrong answer.
What is the IGIC retailer surcharge?
A surcharge that article 51.5 of Ley 4/2012 adds to imports made by retailers for their commercial activity. It runs from 0 % to 2 % depending on the band and is always one tenth of the rate: 0.7 % on the general 7 %. It is the Canarian counterpart of the mainland equivalence surcharge, but proportionally much lighter.

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Author: Thorben Rasmus Idel · Reviewed by: Nahar Geva · Last reviewed: