IGIC (Impuesto General Indirecto Canario, the Canary Islands General Indirect Tax) is the tax that replaces VAT in the Canary Islands. If you buy, sell or import goods or services in the Canaries, you will pay or charge IGIC instead of Spanish VAT, and in most cases at a much lower rate.
The general IGIC rate is 7%, compared with 21% VAT in mainland Spain. The Canary Islands are excluded from EU VAT harmonisation, so IGIC applies instead.
IGIC is a consumption tax that works like VAT: businesses charge it on their sales, deduct the IGIC they pay on their purchases, and pay the difference to the tax authorities. It is regulated by Law 20/1991 of 7 June, and its rates are set by the Canary Islands Government in Canary Islands Law 4/2012 of 25 June (Article 27 of Law 20/1991 refers to Articles 51 to 61 of Law 4/2012).
IGIC applies to supplies of goods and services carried out in the Canary Islands and to imports of goods into the islands, including their territorial sea and airspace (Article 3 of Law 20/1991).
Article 51 of Law 4/2012 sets seven rates. These are the main examples of each (the full lists are in Articles 52 to 59):
| Rate | Main examples |
|---|---|
| 0% | Drinking water, bread, flour, milk, cheese, eggs, unprocessed fruit, vegetables, meat and fish, olive oil, pasta; medicines for human use; books, newspapers and magazines; sea and air transport of passengers and goods between the islands and within the same island (excluding tourist and leisure trips); household electricity with contracted power up to 10 kW. |
| 3% | Other electricity, gas; textiles, clothing, footwear and furniture; most food not taxed at 0%; land transport of passengers and goods; tickets for theatre, concerts and cinema; sports services; veterinary services. |
| 5% | Soft drinks with added sugar or sweeteners. |
| 7% (general) | Everything not covered by another rate: most professional services, restaurants, consumer goods. |
| 9.5% | Motor vehicles up to 11 fiscal horsepower (CV) not taxed at a lower rate. |
| 15% | Motor vehicles above 11 fiscal horsepower, quads, caravans; jewellery and precious stones; perfumes; spirits; cigars priced above €2.50 each. |
| 20% (special) | Tobacco products other than cigars and cigarillos, including disposable e-cigarettes. |
Imports are taxed at the same rate as supplies of the same goods (Article 51.3 of Law 4/2012), and the applicable rate is the one in force when the tax falls due (Article 51.4).
The general IGIC rate is 7%. In mainland Spain the general VAT rate is 21% (Article 90 of the Spanish VAT Act, Law 37/1992).
The Spanish VAT Act expressly excludes the Canary Islands from the territory where VAT is harmonised (Article 3.Two.1.b of Law 37/1992). For VAT purposes, the Canaries are a third territory: mainland Spanish VAT does not apply there.
Because IGIC taxes imports of goods into the islands, goods shipped to the Canaries from mainland Spain, the rest of the EU or third countries are imports for IGIC purposes. This affects customs formalities, delivery times and the price for the final customer.
IGIC is managed by the Agencia Tributaria Canaria (Canary Islands Tax Agency), not by the Spanish State Tax Agency (AEAT) that manages VAT.
It works in the same way, but it is a different tax, with different rates and a different tax authority. It applies only in the Canary Islands.
Restaurant services fall under the 7% general rate unless a specific rate applies.
Yes. IGIC is included in the price of goods and services bought in the Canary Islands, in the same way that VAT is included in prices in mainland Spain.
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