Canary Islands raise IGIC exemption threshold to EUR 50,000 for self-employed

The Canary Islands regional government announced on March 18 that it will raise the IGIC (Impuesto General Indirecto Canario) franchise threshold for self-employed workers and small businesses to EUR 50,000 in annual turnover, effective July 1, 2026. From January 1, 2027, qualifying autonomos will also switch to a single annual IGIC declaration, eliminating the four quarterly self-assessments currently required.

The measure applies through the Special Regime for Small Business Owners or Professionals (REPEP). Autonomos who opt in will not charge IGIC on their invoices, in exchange for forfeiting the right to deduct IGIC on business purchases. The government estimates approximately 11,000 self-employed workers will benefit.

This positions the Canary Islands as the only territory in Spain implementing the kind of small business VAT exemption envisioned by EU Directive 2020/285 — the same directive the European Commission is suing mainland Spain for failing to transpose. The EUR 50,000 threshold exceeds the EU average of around EUR 40,000 and makes the Canaries notably more attractive for small-scale freelancers and digital nomads compared to mainland Spain, where IVA applies from the first euro of revenue.