The Canary Islands have introduced an important tax change that may benefit thousands of self-employed professionals (autónomos) and small businesses across the islands.
From 1 July 2026, individuals whose annual turnover in the previous year was below €50,000 may apply to the Special Regime for Small Businesses and Professionals (REPEP), allowing them to benefit from an exemption from charging IGIC on their invoices.
At Franke & De La Fuente Lawyers, our tax team in Gran Canaria assists entrepreneurs, professionals, and international clients with Canary Islands tax matters, helping them understand how new regulations may affect their business activities and tax planning.
What is IGIC?
IGIC (Impuesto General Indirecto Canario) is the indirect tax system applicable in the Canary Islands. It operates similarly to VAT (IVA) in mainland Spain, although it has its own specific rules due to the Canary Islands’ special tax framework.
Under the new REPEP regime, eligible small businesses and professionals may choose to operate without charging IGIC on their invoices.
What does the new IGIC exemption mean for small businesses?
The new regime provides several advantages for eligible entrepreneurs, including:
- The possibility of issuing invoices without IGIC;
- Simplified tax obligations;
- No need to submit quarterly IGIC declarations under the new system;
- Reduced administrative burden when dealing with the Canary Islands Tax Agency.
For small businesses, this may also create a commercial advantage. By not adding IGIC to invoices, entrepreneurs may choose to:
- Increase their profit margin; or
- Offer more competitive prices to clients.
The right approach will depend on each business model and client structure.
Who can benefit from the new Canary Islands small business regime?
The REPEP regime is available to individuals and self-employed professionals whose annual turnover does not exceed:
€50,000 per year
Previously, the threshold was €30,000 per year. This means that many professionals and small businesses with annual turnover between €30,000 and €50,000 may now qualify for a regime that was previously unavailable to them.
The measure is particularly relevant for freelancers, consultants, service providers, and other small businesses operating in the Canary Islands.
Important considerations before choosing the IGIC exemption
Although the exemption offers clear advantages, businesses should carefully review their circumstances before applying.
Businesses under the REPEP regime:
- Will not charge IGIC on their invoices;
- Generally cannot deduct IGIC paid on business expenses;
- Must ensure that the regime is compatible with their activity and future plans.
For some businesses, the simplified obligations and improved cash flow may be highly beneficial. For others, remaining under the standard IGIC system may be more suitable.
A personalised tax analysis is recommended before making the decision.
Deadline to apply: 31 July 2026
Businesses and professionals who wish to apply for the REPEP regime must submit the relevant census declaration (Modelo 400) by:
31 July 2026
Those who previously had turnover between €30,000 and €50,000, and were therefore outside the previous threshold, should pay particular attention to this deadline.
How Franke & De La Fuente Lawyers can help
Navigating tax changes in the Canary Islands requires an understanding of both local regulations and the practical impact on your business.
Our tax team in Gran Canaria advises entrepreneurs, self-employed professionals, and international clients on:
- IGIC obligations;
- Canary Islands tax planning;
- Business structures;
- Tax compliance requirements;
- The impact of new tax regimes on their activities.
If you are considering applying for the REPEP regime or want to understand how the new IGIC exemption may affect your business, our team can provide tailored advice based on your individual circumstances.
Official source
This article is based on information published by the Government of the Canary Islands regarding the extension of the turnover threshold for the Special Regime for Small Businesses and Professionals (REPEP) and the related IGIC exemption.
Official information:
https://www3.gobiernodecanarias.org/noticias/los-autonomos-canarios-que-facturen-hasta-50-000-euros-anuales-ya-pueden-solicitar-la-exencion-del-igic/
Tax regulations may change. The information provided in this article is intended for general guidance only and does not constitute legal or tax advice. Please contact our tax team in Gran Canaria for advice regarding your specific situation.
