Autónomo in the Canary Islands: IGIC
Last updated: 2026-04-16
Being self-employed (autónomo) in the Canary Islands comes with an important fiscal distinction: the Canary Islands have their own tax regime that replaces IVA with IGIC (Impuesto General Indirecto Canario). This means lower tax rates, a different tax authority, and specific filing forms.
IGIC vs IVA: Key Differences
The most significant difference between operating in the Canary Islands and on the mainland is the indirect tax applied to business activities:
| Aspect | IGIC (Canary Islands) | IVA (Mainland & Balearic Islands) |
|---|---|---|
| General rate | 7% | 21% |
| Reduced rate | 5% | 10% |
| Super-reduced rate | 3% | — |
| Zero rate | 0% | 4% |
| Increased rate | 9.5% | — |
| Special increased rate | 15% | — |
| Special rate | 20% | — |
| Tax authority | Agencia Tributaria Canaria (ATC) | AEAT |
| Quarterly declaration | Modelo 420 | Modelo 303 |
| Annual summary | Modelo 425 | Modelo 390 |
The fiscal advantage is clear: the general rate of 7% versus 21% for IVA represents a saving of 14 percentage points on indirect taxes.
Tax Obligations for Autónomos in the Canary Islands
Canary Islands autónomos have the same categories of obligations as those on the mainland, but with different forms for indirect tax:
Quarterly Obligations
- Modelo 420 — Quarterly IGIC declaration (equivalent to Modelo 303). Filed with the ATC.
- Modelo 130 — Quarterly IRPF payment (Estimación directa). Filed with the AEAT.
- Modelo 131 — Quarterly IRPF payment (Módulos). Filed with the AEAT.
- Modelo 111 — Withholdings on employees and professionals (if applicable). Filed with the AEAT.
- Modelo 115 — Withholdings on commercial property rent. Filed with the AEAT.
Annual Obligations
- Modelo 425 — Annual IGIC summary (equivalent to Modelo 390). Filed with the ATC.
- Modelo 100 — Annual income tax return (Renta). Filed with the AEAT.
- Modelo 190 — Annual withholdings summary. Filed with the AEAT.
Monthly Obligations
- Cuota de autónomos — Social Security contribution, the same across all of Spain. Managed by the TGSS.
Key point: Only IGIC (Modelo 420 and 425) is managed through the ATC. IRPF, withholdings, and Social Security follow the same channels as on the mainland (AEAT and TGSS respectively).
IGIC Tax Rates
The consolidated Canary Islands IGIC law currently includes 0%, 3%, 5%, 7%, 9.5%, 15%, and 20% rates. The standard rate is 7%, but the exact rate depends on the specific operation. For the official legal breakdown, see the consolidated text published in the BOE.
Agencia Tributaria Canaria (ATC)
The Agencia Tributaria Canaria (ATC) is the body responsible for managing, assessing, inspecting, and collecting the Canary Islands' own taxes, including IGIC.
Main Functions
- Management and collection of IGIC and other Canary Islands regional taxes
- Tax inspections related to IGIC
- Resolution of queries and appeals related to Canary Islands taxes
Electronic Filing
Modelo 420 and 425 are filed through the Canary Islands Government's electronic portal:
- Electronic portal: sede.gobiernodecanarias.org/sede/tramites
- ATC portal: gobiernodecanarias.org/tributos/atc
According to the ATC official Modelo 420 page, accepted identification methods include digital certificate or DNIe, DNI + PIN, and Cl@ve. The same page also keeps a help-program/paper route for cases excepted from mandatory telematic filing.
Remember: IRPF forms (130, 131, 100) and withholding forms (111, 115) are still filed with the AEAT through its own electronic portal, just as on the mainland.
Tax Advantages of Being Self-Employed in the Canary Islands
Operating as an autónomo in the Canary Islands offers several significant tax advantages:
Lower Indirect Taxes
The difference between 7% IGIC and 21% IVA translates into more competitive prices for your clients and a lower tax burden on your operations.
Zero Rate for Essential Goods
Unlike IVA, which has a super-reduced rate of 4%, IGIC applies a 0% rate to essential goods, reducing the cost of living.
Régimen Económico y Fiscal (REF)
The Canary Islands have a special economic regime that includes incentives such as the Reserva para Inversiones en Canarias (RIC), deductions for investment in fixed assets, and bonuses for the production of tangible goods.
Zona Especial Canaria (ZEC)
Companies established in the ZEC can benefit from a reduced corporate tax rate of 4% (compared to the standard 25%), provided they meet the requirements for job creation and minimum investment.
Related Articles
FAQ
Do self-employed workers in the Canary Islands pay IVA (VAT)?
The Canary Islands are outside the territorial scope of Spanish IVA, so operations located in the islands are usually subject to IGIC instead. The usual quarterly self-assessment is [Modelo 420 before the ATC](https://www3.gobiernodecanarias.org/tributos/atc/w/modelo-420), but if you operate with mainland Spain, the Balearic Islands, or abroad, you should also review the [AEAT IVA territorial rules](https://sede.agenciatributaria.gob.es/Sede/ayuda/manuales-videos-folletos/manuales-practicos/manual-iva-2023/capitulo-02-introduccion/territorio-que-se-aplica-impuesto.html).
Do I file my taxes with the AEAT or the ATC?
It depends on the tax. IGIC (quarterly Modelo 420 and annual Modelo 425) is filed with the Canary Islands Tax Agency (ATC). IRPF (Modelo 130/131 and Modelo 100) and withholdings (Modelo 111, 115) are filed with the AEAT. Social Security is managed through the TGSS.
Can I deduct IGIC on my purchases?
Yes, the deduction mechanism is identical to IVA. You can deduct the IGIC paid on purchases and expenses related to your professional activity (IGIC soportado) from the IGIC charged to your clients (IGIC repercutido). You need complete invoices with all tax details.
What happens if I invoice clients on the mainland?
Services provided from the Canary Islands to clients on the mainland are subject to IVA localization rules. For B2B transactions, the reverse charge mechanism may apply. This is a complex area — consulting a specialized tax advisor is recommended.
Do I need to register with the ATC?
Yes, if you carry out IGIC-taxable activities in the Canary Islands, you must comply with the Agencia Tributaria Canaria procedures. The [ATC official Modelo 420 page](https://www3.gobiernodecanarias.org/tributos/atc/w/modelo-420) lists electronic identification methods such as digital certificate or DNIe, DNI + PIN, and Cl@ve, and also keeps a help-program/paper route for cases not obliged to file telematically.
Does the tarifa plana (reduced rate) also apply in the Canary Islands?
Yes, the tarifa plana for autónomos applies nationwide, including the Canary Islands. Social Security is a national competence and the reduced contributions are the same regardless of the autonomous community.