What is IGIC in Spain? Canary Islands tax guide

This matters if you live in the Canaries, ship goods there, invoice clients there, or wonder why VAT, shown as IVA in Spain, disappears at checkout. If you manage money between Spain and another country, a Wise account can help with making transfers, but it will not tell you which tax applies.

This guide explains what IGIC is, how it differs from VAT, when it shows up in real life, and when you may need to file or get advice. It will also provide links to the official pages you to check next.

Key takeaways

• Where does IGIC apply? In the Canary Islands only, not in mainland Spain or the Balearic Islands.
• What is the standard rate? The general IGIC rate is 7%, although some goods and services use other rates.
• Is IGIC the same as VAT? No. VAT (known as IVA in Spain), applies in mainland Spain and the Balearic Islands, not the Canary Islands.
• Who may need to file it? Usually businesses, freelancers, and other taxable operators in the Canary Islands, not ordinary consumers.
• Which official page should you check next? Start with the Canary Islands Tax Agency (Agencia Tributaria Canaria).

What is IGIC in Spain?

IGIC stands for Impuesto General Indirecto Canario. It is the Canary Islands’ indirect tax on goods and services, and on many imports into the islands.

It exists because the Canary Islands have a special economic and fiscal regime, known as the Régimen Económico y Fiscal or REF. That means the islands sit outside Spain’s normal VAT territory for this part of taxation.

IGIC does not replace VAT everywhere in Spain. Mainland Spain and the Balearic Islands still use VAT, which you will often see written as IVA on Spanish receipts and invoices.

For broader context, the wider Spanish tax framework helps explain the national picture. For IGIC itself, the safest next step is the Canary Islands Tax Agency, or Agencia Tributaria Canaria (ATC).

IGIC vs VAT in Spain: Key differences

People mix these taxes up because both appear on Spain-related purchases and both are indirect taxes added to transactions. The real dividing line is territory, not language.

If the supply is in mainland Spain or the Balearic Islands, VAT usually applies. If the supply is in the Canary Islands, IGIC may apply instead, and the paperwork, rate, or invoice wording can change.

A parcel sent to mainland Spain and one sent to the Canary Islands may follow different tax and customs steps, even with the same seller. That is why online orders and invoices can feel inconsistent until you know which territory the seller is treating as the destination.

If you are comparing mainland Spain tax rules, Expatica’s guide to VAT refunds in Spain provides useful context. Just do not assume a VAT refund rule or a mainland invoice format carries over to Tenerife, Gran Canaria, or the rest of the archipelago.

When does IGIC apply?

IGIC is most commonly encountered in day-to-day transactions. You may see it on local Canary Islands purchases, on goods brought into the islands, or on invoices linked to Canary Islands place-of-supply rules.

Imports are a common flashpoint. Goods entering the Canary Islands can trigger IGIC at import, and some shipments also involve customs formalities, a DUA or Documento Único Administrativo, and sometimes AIEM, the Arbitrio sobre Importaciones y Entregas de Mercancías en las Islas Canarias, on certain goods.

If you live in or shop from the Canary Islands

As a consumer, you usually notice IGIC when you shop locally or order from outside the islands. A product page may look normal at first, then recalculate once your Canary Islands delivery address is added.

Insider tip: Many mainland Spain stores only update the tax treatment after you enter a Canary Islands shipping address, so always check the final checkout amount and any import handling fees before paying.

If you run a business, are a freelancer, or send invoices

For freelancers and small businesses, the key question is where the sale is treated as happening and what kind of transaction it is. A sale inside the Canary Islands may need IGIC, while a sale to mainland Spain or abroad can be treated differently.

If you work for your own registered company, then corporate tax in Spain is also important to understand. For the invoice itself, get the most up-to-date answer from ATC resources or a qualified advisor.

What are the main IGIC rates?

The IGIC rate most people cite is 7%. While this is the general rate, it’s important to note that IGIC is not a one-rate system, so you shouldn’t assume every purchase or service uses 7% if you want to budget as accurately as possible.

Note that the current consolidated rules also include a 5% reduced rate for some categories, so the table is not exhaustive. Check the ATC site before relying on any specific rate or temporary measure.

Who needs to register for and file IGIC?

Ordinary consumers usually just pay IGIC at checkout or on import. Filing becomes relevant when you act as a taxable operator in the Canary Islands, such as a freelancer, business owner, or landlord.

Under Spanish law, you’re obligated to:

1. Register your activity with Modelo 400 if you start, change, or end a relevant business or professional activity in the Canary Islands.
2. File Modelo 420 if you are in the general IGIC regime and need to make quarterly self-assessments.
3. File Modelo 425 in January as the annual summary if that form applies to your regime.

Remember that filing does not always mean paying. Modelo 425 is a summary, while Modelo 420 can show tax due, a refund, or no payment at all.

Key forms and deadlines

• Modelo 400: census form to start, change, or end a taxable activity.
• Modelo 420: quarterly return for general-regime IGIC taxpayers, usually due in the first 20 days after each quarter, except January.
• Modelo 425: annual summary, generally filed in January with the last IGIC return of the year.

Make sure to check live, official ATC content before filing, because rules and telematic requirements can change.

What REPEP changes for small operators

REPEP, the Régimen Especial del Pequeño Empresario o Profesional, is a special IGIC regime for some small operators, defined by their annual turnover. In practice, it can mean exempt Canary Islands sales and fewer routine filings, but the entry rules and exclusions are strict.

Like any tax regimen, REPEP is subject to change, for example ATC has flagged a €50,000 turnover limit from January 2027. Make sure to double-check using the latest official sources before making any decisions that might be affected by REPEP.

Managing cross-border money in and around the Canary Islands

If you need to pay deposits, receive income from abroad, or buy from international stores during a move, some expats use a free-to-open Wise account to hold euros and other currencies or move funds across borders.