The tourist invoice, with IGIC on it
A holiday apartment, an excursion business or a restaurant here does not charge VAT: it charges IGIC, the Canary Islands general indirect tax, at the rates belonging to that tax and before the Agencia Tributaria Canaria, the regional tax authority. The forms are different, the calendar is different and the annual summary is different.
The part most worth settling from the outset is how the transaction is classified. For holiday accommodation, exactly as happens with VAT on the mainland, what decides it is whether services proper to the hotel industry are supplied during the stay. The logic is the same; the tax that comes out of it is not. It is explained in hotel services and indirect taxation.
The Canary Special Zone and the investment relief: what they are and what they are not
The Zona Especial Canaria is a low-taxation regime within corporation tax for authorised entities that establish themselves on the islands. It is not automatic: it requires prior entry on the ZEC register, an activity among those admitted, and commitments on investment and on job creation within a time limit. We publish neither the rate nor the figures of those commitments here, because they are requirements that get verified and that do not tolerate approximations.
The Canary investment deduction and the reserve for investments are separate pieces, belonging to the Régimen Económico y Fiscal, the special economic and tax regime of the islands, and they apply to businesses investing there while meeting conditions on how the investment is materialised and for how long it is held. Our work here usually consists of saying no rather than saying yes: most of the projects that reach us looking for the ZEC do not need it, and some could not qualify for it at all.
A caution belongs here more than anywhere. The island incentives are conditional regimes, which means they are granted against commitments and withdrawn when the commitments are not met, with the tax saved becoming payable again. A structure that looks efficient on a spreadsheet and cannot meet its own conditions three years later is not a saving; it is a deferred bill with interest attached.
If your project does not fit an incentive, we tell you on the first call and not on the third invoice. And if it does fit but the saving does not justify the structure that has to be set up and kept running, we tell you that too.
Living in the Canaries is more than an address
The regional band of income tax and a good part of the deductions depend on where you have your habitual residence, and that is proved with facts: days, a home, the centre of your interests. Where somebody keeps a house and a job on the mainland and has only registered on the local padrón here, the municipal population roll, the risk of an enquiry is real. We deal with it in sorting out your tax address.
What gets examined in practice is mundane: flight records, utility consumption, where the children go to school, where the car is insured, which bank accounts actually move. A padrón certificate on its own settles nothing, and it is usually the first document offered.
Who writes to us from Santa Cruz de Tenerife
| Who | What they usually face |
|---|---|
| Owner of a holiday apartment in the south | IGIC according to the services supplied, income tax on the rent and apportionment by days |
| Activities or excursions business | The IGIC rate applicable to each service and its annual summary |
| Project considering the ZEC | Knowing whether it meets the requirements before incorporating anything, and what keeping it costs |
| Employee posted by a mainland company | Habitual residence, the regional band and allowances |
| British owner of a villa | Modelo 210 at 24 % with no deduction of costs, and the residence certificate |
How we work with clients in Santa Cruz de Tenerife
We take care of ordinary tax compliance — IGIC, income tax, the census and the state forms — as a quarterly routine at a fixed price, and we treat the incentives of the Régimen Económico y Fiscal as what they are: an investment decision studied beforehand, with numbers, and not an ornament added afterwards.
All of it remotely, in Spanish or in English. For an owner who does not live in Spain, the mechanics are in non-residents. And with a habit that is worth double here: putting in writing which part of a position is safe and which part is defensible but arguable, so that the decision is yours, taken knowing what there is.
If your case reaches into the law of another country, you appoint the adviser there and we work with them. We hold no network of foreign firms and we do not opine on rules we do not practise. What we do is make sure the Spanish and Canary pieces of the answer are consistent with whatever your own adviser concludes.
Arriving in Santa Cruz de Tenerife in March or in July: the 183-day difference
A remote worker for a British company decides to settle on the island. Spain has no split tax year: if you are resident, you are resident for the whole year and are taxed on all your worldwide income for that year, including the months before you arrived. That is why the arrival date is not a logistical detail.
| Arrival | Days in Spain in 2026 | Resident by days | What falls to him in Spain |
|---|---|---|---|
| 1 March 2026 | 306 | Yes | Income tax on all of 2026, January and February included |
| 1 July 2026 | 184 | Yes, by one day | Income tax on all of 2026 |
| 15 July 2026, alone | 170 | No, unless the centre of interests is already here | In principle, 2026 outside; resident from 2027 |
| 15 July 2026, with spouse and minor children living here since January | 170 | The law presumes so, unless proven otherwise | Income tax on all of 2026, unless the presumption is rebutted |
When the United Kingdom considers those same months to be its own, the double tax treaty decides, read with the certificates of residence from both countries. We give no opinion on what the British administration will do; we do say which document you need from it. We develop this in the dual residence conflict and in two certificates of residence.
What you do control is the evidence. Plane tickets, the rental contract, registration on the municipal roll (the padrón), enrolment at the health centre, the children's school registration: these are the documents with which days are counted and the centre of interests is proved. Keep them from the first month, rather than rebuilding them when a question arrives.
The first tax year of a newcomer to Tenerife
| When | What |
|---|---|
| On arrival | Census registration with a tax address on the island and, if he is going to invoice, both registrations: the state one and the Canary one |
| 1 January to 31 March 2027 | Modelo 720 if his accounts, securities or properties abroad exceed the threshold for each block, and Modelo 721 if he holds crypto-assets in custody abroad |
| From April to 30 June 2027 | Income tax return for 2026 with all worldwide income and, where appropriate, the credit for tax paid abroad |
| Every year | A Spanish certificate of tax residence if the payer or bank abroad asks for it |
If before moving you want to know whether the article 93 regime suits you — it too must be requested within six months — start with Beckham or the general regime; and for us to look at your first-year Modelo 720, the form is the one for Modelo 720.
What almost nobody asks when settling on the island with a laptop: if you work steadily from Spain for a foreign company, and especially if you negotiate or close contracts in its name, that company may end up having a permanent establishment in Spain, with obligations of its own here. The risk is the company's, not yours, but when it discovers it, it usually solves it by changing your contract or asking you to come back. We flag it so you can raise it with the company before signing the annual lease; the solution belongs to its advisers.