Are the Canary Islands part of the VAT European territory?

Summary

The Canary Islands, although part of the customs European Community territory, is not included in the VAT European territory. Instead, it has its own tax regime called the Economic and Tax Regime of Canary Islands Law, which includes the General Indirect Tax (IGIC) at a rate of 7%. The Canary Islands also offer tax advantages such as the Special Zone Scheme (ZEC) with a low corporate tax rate of 4% and exemptions on other taxes. The Reserve for Investments in the Canary Islands (RIC) allows for a tax saving of up to 90% on the Corporate Income Tax. DILIGENS provides specialized services in the Canary Islands Economic and Tax Regime, including tax advisory, international tax planning, incorporation of entities, tax compliance, and IGIC refund claims.

Reference to the EU VAT Directive 2006/112/EC

Article 6

1. This Directive shall not apply to the following territories forming part of the customs territory of the Community:
(a) Mount Athos;
(b) the Canary Islands;
(c) the French territories referred to in Article 349 and Article 355(1) of the Treaty on the Functioning of the European Union; ▼B
(d) the Åland Islands;
(e) the Channel Islands ;
(f) Campione d’Italia;
(g) the Italian waters of Lake Lugano.

2. This Directive shall not apply to the following territories not forming part of the customs territory of the Community:
(a) the Island of Heligoland;
(b) the territory of Büsingen;
(c) Ceuta;
(d) Melilla;
(e) Livigno.

Source

• Diligens
• Taxation-customs.ec.europa.eu

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