Let’s be honest, tax talk isn’t the most exciting part of living or traveling in Gran Canaria, right? But if you’ve recently moved here, started freelancing, opened a business, or even if you’re just visiting on holiday and wondering how to handle VAT refunds… you’ve probably come across a strange term: IGIC. IGIC in Gran Canaria: What You Need to Know (Without the Headache)
If your brain is already going “¿qué?”, don’t worry. I’ve been there too. The good news? It’s not as complicated as it sounds. In this post, I’ll break down the difference between IGIC and VAT, how it works if you live here, what happens if you work here, and what visitors need to know to claim a tax refund. Friendly, simple, and stress-free. Let’s go!
🌴First of All… What is IGIC?
In the Canary Islands, we don’t pay VAT (IVA) like the rest of Spain and Europe.
Instead, we have our own local version called IGIC – “Impuesto General Indirecto Canario.” It’s a local sales taxapplied to most goods and services only in the Canary Islands.
The basic stuff:
- IGIC stands for: Impuesto General Indirecto Canario
- Standard IGIC rate: 7% (compared to 21% VAT in mainland Spain!)
- Reduced rates: Some items (like basic groceries, medicine, and books) are taxed at lower rates (0%, 3%, or 5%).
- Luxury goods: Things like tobacco or alcohol may have higher IGIC rates (up to 15-20%).
In short: IGIC is more affordable than VAT, and it helps keep costs lower for locals and businesses in the islands.
🏠 If You’re Living in Gran Canaria (and not working)
If you’re living here but not working say, you’re retired, remote working for a foreign company, or just enjoying life, you’ll still see IGIC added to most purchases (groceries, services, etc.), but you don’t need to do anything about it.
You won’t be collecting, reporting, or deducting IGIC unless you become self-employed or open a business here.
In a nutshell:
✔️ You pay IGIC like everyone else
❌ You don’t need to worry about tax declarations unless you start working as autónomo or create a business.
💼 If You Work in Gran Canaria (as autónomo or a business)
Here’s where it gets a bit more hands-on. If you’re freelancing (autónomo) or have your own business here, you’ll be dealing with IGIC declarations.
What does that mean?
- You charge IGIC (usually 7%) on the invoices you send to clients in the Canary Islands.
- You don’t charge IGIC to clients based in mainland Spain, Europe, or elsewhere.
- Every quarter, you’ll declare how much IGIC you charged, how much you paid for business expenses (with IGIC), and pay the difference to the tax office.
If this sounds overwhelming, don’t panic. Most freelancers and small businesses work with a gestor (an accountant) who takes care of the paperwork for you. It’s totally worth it, especially when you’re starting out.
Also important:
- You still file your income tax (IRPF) separately.
- IGIC is not the same as VAT, so if you’ve worked on the mainland or elsewhere in Europe, the process is different here.
🧳 If You’re on Holiday in Gran Canaria
Here’s a little surprise: since the Canary Islands are outside the EU VAT zone, many travelers don’t realize that they can get a tax refund on purchases they take back home.
Who can claim it back?
If you’re a non-EU resident (for example, from the UK, USA, Canada, etc.), you can ask for a refund of the IGIC paid on certain items, mainly big purchases like electronics, fashion, or souvenirs over a certain value.
How does it work?
- Ask in-store if they offer tax-free shopping. Not all shops do!
- Show your passport at the time of purchase.
- Fill out a tax-free form (usually through systems like Global Blue or Planet).
- Get the form stamped at the airport when you leave the Canary Islands.
- Claim your refund via the tax-free provider (online, app, or at the airport).
Keep in mind:
- You’ll need to leave the Canary Islands within 3 months of the purchase.
- The item should be unused and with you in hand luggage when leaving.
🤔 FAQs – Because Everyone Asks These
“Do I pay IGIC if I shop online from the mainland?”
Yes. But it gets complicated. Some websites already include IGIC, others don’t and sometimes your package gets held at customs and you have to pay import taxes. Yep, annoying.
“Can I deduct IGIC on business expenses as autónomo?”
Yes! You can deduct the IGIC you paid on things like your laptop, phone, coworking space, etc. It helps lower your overall tax bill.
“What if I invoice clients in Germany or the UK?”
If they’re outside the Canary Islands, you usually don’t add IGIC. But always confirm with a gestor to avoid surprises.
🙌 Final Thoughts
IGIC sounds intimidating at first, especially if you’re used to VAT or new to Spain. But once you understand the basics, it’s actually pretty simple and in many ways, more affordable than VAT in mainland Spain or the rest of Europe.
Whether you’re living here, working as autónomo, or just visiting the island for a well-deserved break, knowing how IGIC works will help you avoid confusion and maybe even save some money along the way.
And remember: if you’re ever unsure, ask a local gestor they’re used to these questions and can save you hours of stress.
