This guide provides an overview of IGIC in the Canary Islands, including applicable rates, registration requirements, compliance obligations, and filing deadlines. It is designed for businesses engaging in transactions within the Canary Islands.
IGIC is used in the Canary Islands instead of EU VAT, giving them a competitive edge for tourism and shopping.
Foreign businesses that incur IGIC on eligible expenses in the Canary Islands may be able to reclaim it.
Generally, a business will be entitled to claim a IGIC refund in the Canary Islands if it is not registered for IGIC in the Canary Islands (and thus does not have a Canary Islands IGIC number) and does not make taxable supplies that would be subject to IGIC in the Canary Islands. The business would also need to be established in a country that has established reciprocity with the Canary Islands in relation to VAT/IGIC refunds.
Although the Canary Islands are part of the EU, being an autonomous region of Spain, it does not form part of the EU territory for VAT purposes. Even though the Canary Islands are therefore not bound by the EU VAT Directives, they do operate refund mechanisms similar to the EU 8th and 13th Directives.
IGIC refund applications in the Canary Islands similar to both the EU 8th and 13th Directives are submitted through an online portal managed by the Canary Islands tax office.
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