Self-employed workers and professionals in Canary Islands with an annual turnover of up to 50,000 euros can now apply for IGIC exemption.
The measure, which came into effect on July 1, will allow taxpayers whose turnover does not exceed this threshold to be exempt from charging and declaring IGIC, simplifying their tax obligations and favoring their liquidity. The Canary Islands government expects that up to 11,000 self-employed workers in the Archipelago could benefit, including about 1,000 in Lanzarote.
The Vice President of the Canary Islands Government has highlighted that this measure "responds to the Executive's commitment to support the Canary Islands' productive fabric, especially small businesses and self-employed professionals," which has grown by almost 9,000 self-employed workers since the start of the legislature in 2023, 240 per month. In this regard, he stressed that "the increase of the franchise up to 50,000 euros represents a significant advance in terms of administrative simplification and stimulus to economic activity."
This measure also positions the Canary Islands as the only autonomous community applying the franchise provided for in the European VAT regulations for small businesses, raising the threshold to 50,000 euros, above the average of European Union countries, which is around 40,000 euros.
"While Brussels denounces Spain before the European Court of Justice for denying self-employed workers VAT exemption and while the Spanish Government disregards the demands of self-employed workers, being the only country that has not transposed the European directive that exempts those earning less than 85,000 euros annually from charging the tax, the Canary Islands Government takes a step forward and consolidates its own model of fiscal simplification for entrepreneurs and the self-employed," he stated.
The Special Regime for Small Businesses or Professionals (REPEP) will allow self-employed workers and individuals who do not exceed 50,000 euros annually and who wish to voluntarily opt for this optional regime, not to charge IGIC on their invoices, in exchange for not deducting input tax on purchases. This measure reduces their annual declarations from five to one, simplifying their relationship with the Canary Islands Tax Agency.
The regional Executive's intention is that from January 1, 2027, self-employed individuals under this regime will submit a single annual IGIC declaration, eliminating the four quarterly self-assessments and reducing the possibility of formal errors and management requirements.
Until July 31
To opt for this option, the small business owner or professional has until July 31 to submit the census declaration (model 400) indicating that they wish to join the REPEP.
The vice president explained that “this Government does support self-employed workers, and actions like this one, together with the Autonomous Support Plan, which includes measures to support work-life balance, hiring, sick leave, and investment through interest subsidies on loans, allow us to accompany the self-employed from beginning to end, from when they start their activity until its consolidation. Our objective since we came to government has been to become the self-employed person's best ally.”
Precisely, last Thursday the vice president, Manuel Domínguez, and the president of the Association of Self-Employed Workers, Lorenzo Amor, held a meeting with self-employed individuals from the islands where they explained the Autonomous Support Plan, whose measures are all already in place, with calls open, and which has been awarded by ATA for being an “ambitious project” that addresses the demands of self-employed workers. “This plan, along with the fiscal and bureaucratic relief measures, implemented by the Government of the Canary Islands, is being an example for other autonomous communities that are already copying these proposals,” assured Lorenzo Amor.