We’re now three months into the new tax year and as usual, there is much work to do, taxes to file and legislation to plough through as we try to figure out what’s new in the business world in Spain. This time it is to do with IGIC (Impuesto General Indirecto Canario), the Canarian equivalent of VAT. Since we live on a small island in the middle of the Atlantic, we had to have some advantages, right? Well, one of those advantages is a reduced VAT rate so as opposed to countries on mainland Europe that may pay around 20% to 27%, in the Canaries, the general rate is 7%. Bear in mind, everything we have is imported so this is a massive deal!
Anyway, Law 7/2017, 27th December of the General Budget for the Canary Islands was approved and within it, new legislation that directly concerns business owners and their obligation to declare IGIC. Those sole-traders and professionals whose total volume of operations for the previous tax year did not exceed 30.000 euros (excluding IGIC), may be eligible to an IGIC exemption, meaning they would be excluded from this tax. If on the 1st January 2018, they find they meet the criteria, they must inform the Canarian Tax Office (Agencia Tributaria Canaria) of their wish to either be included or excluded in this special system before the 2nd April 2018.
