The IGIC (General Indirect Canary Tax) is a consumption tax applied in the Canary Islands. It is similar to the VAT applied in the rest of Spain, but it has its own characteristics and specific tax rates, which can be found at the following link: BOE link.
Who is required to apply IGIC?
IGIC is applied to all individuals or entities conducting economic activities within the Canary Islands. This includes self-employed individuals, companies, and professionals who sell goods or provide services in the Canary Islands.
What is the general IGIC rate?
The general IGIC rate is 7%. However, there are reduced rates for certain products and services, such as (among others):
- A reduced rate of 3% for some food products, cultural services, public transport, etc.
- A super-reduced rate of 0% for certain transactions related to the export of goods outside the Canary Islands.
How do I know if a transaction is subject to IGIC?
Transactions carried out within the Canary Islands are generally subject to IGIC. However, there are some exceptions, such as exports of goods outside the Canary Islands, which are exempt from IGIC.
What transactions are exempt from IGIC?
The main transactions exempt from IGIC include:
- Exports of goods outside the Canary Islands.
- International services: such as transportation services for people or goods outside the Canary Islands.
How should I apply IGIC if I invoice outside of the Canary Islands?
- If invoicing within the EU: Depending on the location rules and type of transaction, there will be different fiscal implications.
- If invoicing outside the EU: Exports of goods and certain services outside the EU are exempt from IGIC, as long as the requirements to qualify them as exports are met.
Xolo’s platform automatically applies the correct tax rules based on the type of transaction and the client’s location, ensuring compliance with IGIC regulations. You don’t need to worry about manually applying IGIC—our system handles it for you!