By Camila Sánchez García · Immigration Lawyer at MoveWise · Last updated: 6 November 2026

⚠️ Important: This guide explains how the rules work in general. It is not tax advice. MoveWise is an immigration consultancy, not a tax adviser: before you make any tax decision, speak to a qualified tax adviser (in Spain, an asesor fiscal).

💡 The short answer: The Canary Islands are part of Spain, so if you live there as a tax resident you pay the same Spanish personal income tax (IRPF), with the Canary Islands' own regional scale and deductions. The main difference is indirect tax: Spanish VAT (IVA) does not apply in the islands, which have their own tax, the IGIC, with a 7% general rate. The islands also offer incentives for companies, such as the ZEC. They are not a tax haven for residents.

Key facts for 2026

• No IVA: the Canary Islands are outside the scope of Spanish VAT (Agencia Tributaria).
• IGIC general rate: 7% (art. 32, Decreto Legislativo 1/2025, consolidated text updated 7 April 2026). Other IGIC rates range from 0% to 20%.
• Who manages IGIC: the Agencia Tributaria Canaria (ATC). IGIC also applies to imports of goods into the islands, whoever imports them.
• Income tax: IRPF applies in the Canary Islands as in the rest of Spain, taking into account the islands' specific rules (art. 4, Ley 35/2006).
• Regional scale: like every region of the common system, the Canary Islands set their own IRPF scale and deductions (Ministerio de Hacienda).
• Tax residence: the same Spanish tests apply (art. 9, Ley 35/2006).
• ZEC: a special corporate tax regime for qualifying companies (Ley 19/1994).

This guide is for people considering a move to Gran Canaria, Tenerife or another island, usually on a Spanish Digital Nomad Visa or Non-Lucrative Visa, who keep reading that the Canaries "have lower taxes" and want to know what that really means.

It is written by the MoveWise Legal Managers who handle Spanish residency files, and each statement is linked to an official source.

The most common misunderstanding: reading "lower taxes" as "lower income tax". The best-known difference is in indirect tax, the tax inside the prices you pay.

In this guide:

• Is this guide for you?
• What changed in 2026
• What stays the same: you are in Spain
• What is different: IGIC instead of IVA
• If you will be self-employed in the islands
• Bringing goods and parcels to the islands
• The ZEC: a regime for companies
• Three myths about Canary Islands taxes
• When you need a tax adviser
• Frequently asked questions
• How MoveWise can help

Is this guide for you?

✅ It is for you if:

• You plan to live in the Canary Islands as a remote worker, retiree or family. Our guide to moving to the Canary Islands covers visas, costs and housing.
• You are comparing Las Palmas or Santa Cruz with mainland cities, for example in our list of the best cities in Spain for digital nomads.

❌ It is not for you if:

• You need a calculation for your own income or business. That is work for a qualified tax adviser.
• You want the general picture for the whole of Spain. Start with taxes in Spain for expats.

👉 Planning to live in the Canary Islands on a Spanish visa? Book a free consultation with a MoveWise Client Manager — we will look at which visa route fits your income and plans.

What changed in 2026

• ✅ Consolidated IGIC law: since 2025, the IGIC and AIEM rules are gathered in Decreto Legislativo 1/2025; the BOE consolidated text was last updated on 7 April 2026.
• ✅ Temporary zero rates: according to the Agencia Tributaria Canaria, exceptional measures apply a zero IGIC rate from 8 April 2026 to fuels and some energy products (petroleum products, gas, biomass pellets and briquettes, firewood) and to salt, butter and roasted coffee. The ATC says the fuel measure may end in November or December 2026, depending on fuel prices in the islands, so check the current position.
• ✅ General rate unchanged: 7%, as of October 2026.

What stays the same: you are in Spain

The Canary Islands are a Spanish autonomous community, so for an individual most of the tax framework is the Spanish one.

• ✅ Tax residence: the article 9 tests apply. You are generally resident if you spend more than 183 days in Spain in a calendar year (sporadic absences count) or if your main economic interests are in Spain. Days in the islands count as days in Spain. See tax residency in Spain.
• ✅ Personal income tax (IRPF): residents are taxed on their income wherever it arises (art. 2, Ley 35/2006). Article 4 of the same law applies IRPF in the Canary Islands, taking into account their specific rules.
• ✅ Regional part of IRPF: according to the Ministerio de Hacienda, the regions set their own progressive scale and deductions. In the Canaries, the regional part follows the Canarian scale published by the Agencia Tributaria. Whether your overall tax is higher or lower than in another region depends on your situation; this guide does not compare amounts.
• ✅ Canarian deductions: for tax year 2025, the Agencia Tributaria lists regional deductions for Canary Islands residents, for example for the rent of the habitual residence, childcare, education expenses and moving to another island for work. Each has its own conditions and limits; your adviser checks which apply.
• ✅ Special regimes: state regimes such as the Beckham Law (art. 93, Ley 35/2006) are the same in the islands. See our Beckham Law guide and our guide to digital nomad taxes in Spain.
• ✅ Social Security: the Spanish system applies. See Spanish Social Security for expats.
• ✅ Wealth and inheritance taxes: these are taxes in which the regions have their own powers, so the Canary Islands apply their own regional rules. Ask an adviser how they affect you.
• ✅ Immigration paperwork: the same visas, the same NIE and TIE, and the same padrón registration.

What is different: IGIC instead of IVA

The Impuesto General Indirecto Canario (IGIC) is the islands' indirect tax. According to the Agencia Tributaria Canaria, it applies to:

• ✅ Supplies of goods and services carried out in the Canary Islands by businesses and professionals in the course of their activity.
• ✅ Imports of goods into the islands, whatever the importer's status.

Rates. Article 32 of Decreto Legislativo 1/2025, the consolidated Canarian law on IGIC, states that the general rate is 7%. The same article sets other rates, from a zero rate up to a special 20% rate for specific goods.

The ATC's list of frequent IGIC rates for travellers' refunds (updated August 2026) gives practical examples:

• 0%: bread, olive oil, unprocessed fruit and vegetables, water, books, newspapers and medicines.
• 3%: clothing and footwear (except luxury furs), among other items.
• 7%: mobile phones, tablets, computers, televisions, household appliances, cosmetics, wine and beer.
• 15%: jewellery, spirits and perfume extracts (eau de toilette and eau de parfum are listed at 7%).
• 20%: blond and dark tobacco (the list shows cigars at 7% or 15%, depending on their price).

As a consumer, you pay IGIC inside the price, just as you would pay IVA on the mainland. Prices also depend on transport and other costs, so a lower rate does not automatically mean lower prices. For living costs, see our cost of living in Spain guide.

⚠️ Illustrative estimate, not a tax calculation. These figures are rough estimates to give you an idea of the order of magnitude. They are not a tax calculation and must not be relied on: the real result depends on your whole situation (the exact product, the seller, how it reaches you, transport and other costs). Always ask a fiscal lawyer or an experienced accountant to run your exact numbers.

Assumptions: a laptop priced at €1,000 before tax, bought in a shop; IGIC at 7%, the rate the ATC lists for computers; IVA at the 21% general rate on the mainland. Left out: shop margins, transport costs and any temporary measure.

• In the Canary Islands: €1,000 + IGIC of about €70 = about €1,070.
• On the mainland: €1,000 + IVA of about €210 = about €1,210.
• Difference in tax on this purchase: about €140.

Whether a regime suits you depends on conditions this example ignores; a fiscal lawyer or an experienced accountant can tell you. Shelf prices in the islands can still differ, because transport and other costs are part of them.

If you will be self-employed in the islands

Businesses and professionals charge IGIC on their supplies in the islands, so a freelancer living there deals with the ATC as well as the Agencia Tributaria.

• ✅ Forms: according to the ATC, IGIC has its own forms, including modelo 400 (census registration, changes or deregistration), modelo 420 (quarterly return under the general regime) and modelo 425 (annual summary). These sit alongside your state registrations, described in our autónomo guide.
• ✅ Small business regime (REPEP): the ATC describes a special IGIC regime for individuals established in the islands whose volume of operations did not exceed €50,000 in the previous calendar year: their IGIC operations in the islands are in principle exempt. The ATC's page on the 2026 measures explains that the limit was €30,000 and rises to €50,000 from 1 January 2027, so check the figure for the year concerned. It does not apply to companies, and it is incompatible with the general regime and most other special regimes.
• ✅ Clients outside the islands: which tax applies to an invoice depends on where the service is located and who the client is. Ask an adviser before you start invoicing.

💡 Pro tip: Ask your adviser before you start whether you also need the Canarian census registration (modelo 400) besides modelo 036. People who move from the mainland sometimes overlook the Canarian side.

👉 Want to know whether your remote income fits the Digital Nomad Visa before you choose an island? Ask a MoveWise Client Manager — we check the visa side; tax questions go to an independent adviser.

Bringing goods and parcels to the islands

Because IGIC also applies to imports of goods into the islands, moving belongings or buying online from the mainland works differently from moving within the peninsula.

• ✅ Import clearance: according to the ATC, goods entering the islands from the peninsula, the Balearic Islands, Ceuta, Melilla, another EU state or a non-EU country go through an import declaration (despacho de importación), with payment of IGIC, of the AIEM (Arbitrio sobre Importaciones y Entregas de Mercancías) where it applies and, where relevant, customs duties and excise taxes.
• ✅ Postal parcels for individuals (modelo 040): the same page describes a self-clearance form for private individuals receiving EU parcels through Correos (not courier companies). The ATC lists it for IGIC when the total value of the goods is over €150, and for the AIEM, where it applies, whatever the value. You pay before you collect the parcel, and you attach your ID and the invoice, order or a declaration of value.
• ✅ Rates on imports: the ATC publishes a list of IGIC and AIEM rates for frequently imported goods; computers, for example, are listed at 7% IGIC.
• ✅ Couriers and removals: shipments through courier or removal companies follow other clearance procedures. Ask the company and the ATC which procedure applies and whether any relief exists for a change of residence in your case.

⚠️ Common mistake: Ordering online to a Canary address and assuming the price at checkout is final. Import taxes and clearance can be added on delivery.

The ZEC: a regime for companies

The Zona Especial Canaria (ZEC) is part of the islands' special economic and tax regime, created by Ley 19/1994.

• ✅ What it is: according to the Agencia Tributaria, ZEC entities that pay corporate tax can apply a special reduced rate to part of their tax base, within the limits set by Ley 19/1994.
• ✅ Who it is for: companies that set up in the islands and meet the ZEC requirements, including a minimum level of job creation.
• ❌ Who it is not for: it does not change the personal income tax of an individual employee, freelancer or remote worker.

Whether a business could qualify is a question for advisers who specialise in the Canarian tax regime.

Three myths about Canary Islands taxes

• ❌ "The Canary Islands are a tax haven." They are part of Spain. Residents pay Spanish income tax; the special regime mainly concerns indirect tax and business incentives.
• ❌ "Moving to the islands lowers my income tax." Your income tax follows the Spanish rules with the Canarian regional part. How that compares with another region depends on your income and circumstances.
• ❌ "No VAT means no tax on purchases." IGIC replaces IVA. You still pay it inside the price of most goods and services.

When you need a tax adviser

Speak to a qualified tax adviser, ideally one familiar with the Canarian regime, before you act if:

• You will invoice clients as a freelancer from the islands, or the REPEP may concern you.
• You plan to set up or run a company, or are interested in the ZEC.
• You have income from more than one country, or a pension from abroad.
• You own property in the islands, elsewhere in Spain or abroad.
• You are a US citizen, or your family lives in different countries.
• You arrive or leave part-way through a year.

Frequently asked questions

What is IGIC in Spain?

IGIC (Impuesto General Indirecto Canario) is the indirect tax of the Canary Islands, used there instead of Spanish VAT (IVA). It applies to goods and services supplied in the islands by businesses and professionals, and to imports of goods into the islands. The Agencia Tributaria Canaria manages it.

What is the VAT rate in the Canary Islands?

There is no Spanish VAT in the Canary Islands. The islands apply IGIC, whose general rate is 7% under article 32 of Decreto Legislativo 1/2025. Other IGIC rates, from 0% to 20%, apply to specific goods and services.

Do you pay income tax in the Canary Islands?

Yes. If you are tax resident in Spain and live in the Canary Islands, you pay the Spanish personal income tax (IRPF), like residents elsewhere in Spain. The regional part of the tax follows the Canary Islands' own scale and deductions. A qualified tax adviser can explain what that means for your income.

Are the Canary Islands a tax haven?

No. The Canary Islands are part of Spain and residents pay Spanish income tax. The islands have a special economic and tax regime, mainly visible in indirect tax (IGIC instead of IVA) and in incentives for companies such as the ZEC, but this is not a general exemption for individuals.

What is the ZEC in the Canary Islands?

The Zona Especial Canaria (ZEC) is a corporate tax regime for companies that set up in the islands and meet its requirements, including job creation. Qualifying entities can apply a special corporate tax rate to part of their tax base. It concerns companies, not the personal income tax of employees or remote workers.

Do I pay IGIC on parcels from mainland Spain?

They can be taxed. Goods entering the islands from the peninsula go through import clearance with IGIC and, for some goods, the AIEM. For EU parcels sent by Correos to private individuals, the ATC's simplified form (modelo 040) covers IGIC when the total value is over €150, and the AIEM whatever the value.

What is the REPEP in the Canary Islands?

It is a special IGIC regime for self-employed individuals established in the islands whose volume of operations did not exceed the limit set for the previous year (€50,000 from 2027, €30,000 before, according to the ATC). Their IGIC operations in the islands are in principle exempt. Ask an adviser whether it fits your activity.

Can I live in the Canary Islands on a Spanish visa?

Yes. The Canary Islands are part of Spain, so the same residence routes apply, including the Spain Digital Nomad Visa and the Non-Lucrative Visa. After arrival you register on the padrón and obtain your TIE as anywhere else in Spain.

How MoveWise can help

MoveWise handles the visa and residency side of a move to the Canary Islands. Your Legal Manager:

• ✅ Prepares and files your Digital Nomad or Non-Lucrative Visa application.
• ✅ Handles the registrations that belong to your residency: NIE and TIE, padrón and, where it is part of your service, Social Security registration.
• ✅ Explains the steps after approval, from your first appointment to your renewal.

We do not give tax advice, file tax returns or apply for tax regimes on your behalf. For tax questions, we can put you in touch with independent qualified tax advisers we work with.

Our support is modular: an eligibility assessment first (Module 1), then full preparation and submission (Module 2). If your application is refused, you receive a full refund of our fee, under the conditions of our service agreement. Clients have left more than 500 client reviews on Trustpilot.

👉 Book a free consultation with a MoveWise Client Manager — tell us which island you have in mind, and we will explain the visa route and the steps after arrival.

Sources and legal references

• Agencia Tributaria: VAT territorial scope (Canary Islands, Ceuta and Melilla excluded)
• Decreto Legislativo 1/2025, consolidated text of the IGIC and AIEM rules (BOE, updated 7 April 2026)
• Agencia Tributaria Canaria: IGIC
• Agencia Tributaria Canaria: frequent IGIC rates for travellers' refunds
• Ley 35/2006 del IRPF, text published by the Agencia Tributaria (arts. 2, 4, 9, 93)
• Agencia Tributaria: tax residence in Spain
• Ministerio de Hacienda: Tributación Autonómica, Medidas 2025 (updated 29 April 2026)
• Agencia Tributaria: ZEC entities, Corporate Tax manual 2025
• Agencia Tributaria Canaria: exceptional tax measures (Middle East crisis)
• Agencia Tributaria Canaria: REPEP, small business or professional regime
• Agencia Tributaria Canaria: modelo 040, simplified import declaration for postal parcels
• Agencia Tributaria Canaria: IGIC and AIEM rates for frequently imported goods
• Agencia Tributaria: 2025 regional income tax scale, Canary Islands
• Agencia Tributaria: 2025 regional deductions, Canary Islands

This article is general information about Spanish and Canary Islands tax rules, verified on 6 November 2026. It is not tax, legal or financial advice and does not take your personal situation into account. Tax law and its interpretation change often. Always confirm your position with a qualified tax adviser before acting.

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