VAT in the Canary Islands in 2026

Consultoria EHERO

12 minutos de lectura

In the Canary Islands, VAT is not charged. IGIC, the Canary Islands General Indirect Tax, is charged instead, because the archipelago is outside the EU VAT territory even though it remains within its customs territory. It was created by Law 20/1991 and is administered by the Canary Islands Tax Agency, not the AEAT. Its standard rate is 7%, and there are seven more rates below and above it.

The rates and product lists are set out in the consolidated text approved by Legislative Decree 1/2025, of 13 October, in force since 21 October 2025, which replaced the IGIC articles of Law 4/2012. And beware of any table dated before 2026: Budget Law 9/2025 moved three rates on 1 January, Decree-Law 3/2026 and 4/2026 moved them again in April and July, and Law 5/2026, Canary Islands Science Law, added another zero rate on 17 August.

Rate	Percentage	Applies to
Zero (zero rate)	0%	Water, bread, gofio, flour, milk, cheese, eggs, fruit, vegetables, legumes, cereals, unprocessed meat and fish, olive oil and dry pasta, plus salt, butter and roasted coffee since 8 April 2026; medicines; books, newspapers and magazines, including digital; sanitary pads, tampons, menstrual cups and condoms; diapers; bicycles, including pedal-assist ones; and passenger transport between islands
Specific (specific rate)	1%	Petroleum and products derived from petroleum refining, even when mixed with biofuels, and gas since 1 July 2026. New rate since 1 January 2026: petroleum had previously been at 0%. It is not currently charged, because Decree-Law 4/2026 restored the zero rate until 30 September 2026
Super-reduced (super-reduced rate)	3%	Clothing, footwear, textiles, leather, wood, paper, plastics, cement, metals, furniture and mattresses; technical and construction glass and ceramics, not tableware or decorative items, which go at 7%; chemical products except perfumes and cosmetics; sanitary products; food that does not go at 0%, except alcohol, soft drinks and prepared food; flowers and plants; seeds, fertilizers and plant protection products; crafts registered in the Canary Islands Craft Register
Reduced (reduced rate)	5%	Soft drinks with added sugar of up to 5 grams per 100 milliliters. If they contain more sugar, they go at 7%
Standard (standard rate)	7%	Everything not included in the other lists: electronics, household appliances, cosmetics, toys, prepared food for immediate consumption and almost all services
Increased (increased rate)	9.5%	Motor vehicles of up to 11 fiscal horsepower, ships and aircraft that are not taxed at 0%, 3%, 7% or 15%. Renting them, however, is taxed at 15%
Increased (increased rate)	15%	Spirits and energy drinks, cigars costing more than €2.5 each, jewelry and objects made of gold, silver or platinum, perfumes and extracts, luxury fur goods, vehicles of more than 11 fiscal horsepower and caravans, and the leasing of vehicles, ships and aircraft taxed at 9.5% or 15%
Special (special rate)	20%	Tobacco products, except cigars and cigarillos. Includes disposable electronic cigarettes

Rates verified on 12 September 2026 against the consolidated IGIC and AIEM text (Legislative Decree 1/2025, of 13 October) published in the Official Gazette of the Canary Islands (gobiernodecanarias.org).

The IGIC “reduced” rate is no longer 3%, and since 2026 there has been a 1% rate

Until October 2025, 3% was the reduced rate of IGIC. The consolidated text renamed it: 3% became the super-reduced rate and the name reduced rate was kept for 5%. It is a label change, not a percentage change, but it serves as an expiry date: any table calling 3% “reduced” was written under the IGIC articles of Law 4/2012, which the consolidated text repealed on 21 October 2025.

On 1 January 2026, the figures did change. The ninth final provision of Law 9/2025, of 23 December, on the Canary Islands budget, moved three pieces: it created Article 33 bis with a 1% specific rate for petroleum and refining products, which had previously been at 0% because those goods left AIEM; it left 5% only for soft drinks with added sugar of up to 5 g per 100 ml, so the more sugary ones moved to 7%; and it raised energy drinks to 15%. It also placed medical and hospital beds in the zero rate.

And in 2026 there were three more changes, the ones most tables miss. Decree-Law 3/2026, of 6 April put salt, butter and roasted coffee, including decaffeinated coffee, at the zero rate from 8 April, and moved gas to the 1% rate from 1 July, taking it out of 3%. Decree-Law 4/2026, of 29 June, with its correction of errors of 1 July, applies the zero rate to petroleum, refining derivatives, gas, biomass pellets and firewood until 30 September 2026, and it is renewed month by month according to the CPI for petrol and diesel: the Canary Islands Tax Agency confirmed on 31 August that it still applies in September. In other words, the 1% rate exists in the law but is not currently charged on anything. There is a fourth change that does not include the word IGIC in the title and therefore escapes everyone: the first final provision of Law 5/2026, of 16 July, Canary Islands Science Law —with the correction of errors of 14 August, which correctly identifies the amended rule— added item 8) to Article 33.Three of the consolidated text and placed deliveries, service provisions and imports intended for research, development and technological innovation activities of public-law entities and Canary Islands public-sector companies at the zero rate from 17 August 2026, with a signed declaration from the purchaser and excluding real estate, non-scientific vehicles, travel, hospitality and catering. It does not affect you when selling to consumers, but it counts for the list of 2026 rules.

What most confuses people coming from VAT is where each item falls. Clothing, footwear, textiles, furniture and mattresses go at 3%; electronics and cosmetics, at 7%. Renting a car that is sold at 9.5% is invoiced at 15%. And there is a surcharge that does not exist in VAT: the Canary Islands retail trader who imports goods for resale pays, in addition to IGIC, a wholesale margin surcharge of 0.7% on items taxed at 7%, 0.3% on items taxed at 3% and 0.1% on items taxed at 1%. You do not pay it from mainland Spain, but it explains why a Canary Islands wholesale customer scrutinizes the rate you assign to each item.

What happens with VAT when you sell from Spain to the Canary Islands

The Canary Islands are part of Spain, but not part of the EU VAT territory. When you ship from mainland Spain, the Balearic Islands or any other EU country to a Canary Islands customer, the sale is an export: invoice without VAT, exempt under Article 21 of Law 37/1992. There is no one-stop shop, no €10,000 threshold, and neither OSS nor IOSS applies: the AEAT itself prohibits entering codes F48 (IOSS) and F49 in import declarations for the Canary Islands, because those are VAT schemes that do not exist there.

The proof of exemption is not the invoice. When the shipment is cleared with an H7 declaration, the AEAT generates a departure certificate accessible from its portal, and that certificate is the proof of exemption under Article 21. Keep it together with the invoice and the transport document. For shipments to the Canary Islands from VAT territory, the exporter’s tax ID — yours — is also mandatory in the declaration.

IGIC is settled on import and is owed by the recipient, based on the price plus transport and insurance. What determines how much paperwork is needed is the value of the shipment:

Up to €150 total value: exempt from IGIC under Article 14.11 of Law 20/1991, with no customs declaration, using an H7 declaration that may be filed by the buyer themself (with Cl@ve, a certificate or electronic ID and the tracking number) or by the carrier. The exemption does not cover alcohol under NC codes 22.03 to 22.08, perfumes and colognes, or tobacco.
More than €150: import customs declaration and IGIC at the product’s rate — 0%, 1%, 3%, 5%, 7%, 9.5%, 15% or 20% — plus any clearance fees charged by the carrier.
AIEM is separate. That €150 exemption applies only to IGIC: Article 73 of Law 20/1991, which lists the exemptions from the levy on imports and deliveries of goods, does not include Article 14.11. If your product is in Annex 2 of the consolidated text — beverages, tobacco, construction materials, chemical products, paper, textiles, food, etc. — the levy still applies. The EU authorization for AIEM, Decision (EU) 2020/1792, expires on 31 December 2027.

If you want the package to arrive without the customer being charged anything, the carrier can file the H7 on their behalf without identifying their tax ID, but the Canary Islands Tax Agency only authorizes this under a strict condition, set out in its Resolution of 2 November 2021: the shipment must be fully prepaid and no additional charge may be passed on to the recipient upon delivery for the declaration.

And do not confuse this with the European change this summer. Regulation (EU) 2026/382, applicable from 1 July 2026, abolished the €150 customs exemption for shipments arriving from third countries and replaced it, until 1 July 2028, with a customs duty of €3 per item in postal shipments and in shipments covered by IOSS. That is a tariff, and the Canary Islands are inside the customs union: goods leaving mainland Spain do not pay tariffs, and the IGIC exemption remains €150.

How to prepare WooCommerce to sell to the Canary Islands

Here is the trap that breaks the most stores: for WooCommerce, the Canary Islands are country ES. If you have a tax row with country ES and the rest blank, an order to Las Palmas will go out with 21% Spanish VAT. You need to go down to province level:

Rows at 0% for the two Canary Islands provinces. In each tax class you use, add one row with country ES and state GC (Las Palmas) and another with ES and TF (Santa Cruz de Tenerife), both at 0%, and tick the shipping box in both so freight is also exempt. If it suits you, do the same with CE (Ceuta) and ML (Melilla), which are not VAT territory either.
Check priority with a test order. A generic ES row and an ES-by-province row with the same priority will override each other. Place one order to postal code 35001 and another to 38001 and see which tax appears: it must be €0.00 on the product and on shipping. Calculate taxes based on the customer’s shipping address, not the billing address.
Say it at checkout. If you ship with costs paid by the customer, they will pay the import IGIC and the carrier’s clearance fees: warn them on the shipping page and in the cart, with the amount of the rate that applies to what you sell. If you ship with all costs prepaid, include those costs in the price; it is also the only way for the H7 to go without the customer’s tax ID and for the package to be delivered without extra charges.
The invoice and the archive. Issue it without VAT, with the exemption note from Article 21 of Law 37/1992, and keep the invoice, transport document and H7 departure certificate for each order. That is what they will ask for if the tax authorities review the exemption.

Selling to other EU countries from WooCommerce?

EHERO Woo VAT applies each country’s rate product by product, checks VAT numbers against VIES at checkout and keeps an eye on the €10,000 threshold for you.

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Frequently asked questions

What is the VAT in the Canary Islands in 2026?

None: VAT does not apply in the Canary Islands, but IGIC does. The standard rate is 7%, and there are seven more: 0%, 1%, 3%, 5%, 9.5%, 15% and 20%. They are set by the consolidated text approved by Legislative Decree 1/2025, of 13 October, with the amendments of Law 9/2025 and Decree-Laws 3/2026 and 4/2026. Watch out for the 1% rate: its products are temporarily at zero rate until 30 September 2026.

What changed in IGIC on 1 January 2026?

Three things, all from Law 9/2025, of 23 December, on the Canary Islands budget. Petroleum and refining products left 0% and moved to a 1% specific rate. The 5% rate was kept only for soft drinks with up to 5 g of added sugar per 100 ml; with more sugar, 7%. And energy drinks rose from 7% to 15%. Later there were more changes: since 8 April, salt, butter and roasted coffee have been at 0%; since 1 July, gas moved from 3% to 1%; and petroleum, gas, pellets and firewood have a temporary zero rate until 30 September 2026.

I sell from Spain to the Canary Islands, what VAT do I charge?

None. The Canary Islands are part of Spain but not VAT territory, so the sale is an export exempt under Article 21 of Law 37/1992. The recipient pays IGIC on import, at the rate that applies to the product. If the total value of the shipment does not exceed €150, it is exempt from IGIC under Article 14.11 of Law 20/1991 and an H7 declaration is enough, with no customs declaration.

Do I have to register in the Canary Islands?

If you only ship from mainland Spain, no: there is no one-stop shop here and no €10,000 threshold, because there is nothing to declare on the islands. You do need to if you establish yourself there or store goods there and sell from the Canary Islands: then you charge IGIC and file forms 420 and 425 with the Canary Islands Tax Agency. The small business regime, with an exemption up to €30,000 per year — €50,000 from 1 January 2027 — only applies to natural persons established in the Canary Islands.