Taxes & Accounting in Tenerife
Canary Islands
Tax in Tenerife is not mainland tax with better weather. The islands sit outside the EU VAT area for indirect tax purposes and apply IGIC instead of IVA, which changes how you invoice, what you charge, what you can reclaim and which returns you file. An accountant working from mainland templates will get the invoicing wrong from the first month.
On top of that sits the Régimen Económico y Fiscal established by Ley 19/1994 — the RIC investment reserve and the ZEC low-tax zone among them. These are genuine incentives, not loopholes, but they carry conditions on investment, employment and activity that have to be planned for before you structure a business, not discovered at year end.
Local context: Tenerife
| Extranjería office | Oficina de Extranjería de Santa Cruz de Tenerife, the province that also covers La Palma, La Gomera and El Hierro |
|---|---|
| Island access | Inter-island flights or ferries are part of the calendar for anyone whose file touches another island in the province |
| Company registry | Registro Mercantil de Santa Cruz de Tenerife |
| Local context | Year-round mild weather draws long-stay remote workers, and the island tax rules make the choice between autónomo and an SL a genuinely different calculation from the mainland |
| Indirect tax | IGIC, not mainland IVA, at a lower general rate |
| Tax regime | Régimen Económico y Fiscal de Canarias (Ley 19/1994), including the RIC reserve and the ZEC zone |
| Tax administration | Agencia Tributaria for state taxes; the Canary tax body for IGIC |
| Work authorisation | Granted by the central Oficina de Extranjería |
Sources: Gobierno de Canarias — Tributos · Ley 19/1994 — REF de Canarias (BOE) · Zona Especial Canaria (ZEC) · Agencia Tributaria
What we handle: Taxes & Accounting
Beckham Law, autónomo filings, IRPF, Modelo 720 and bookkeeping.
- Non-resident income tax (IRNR)
- Beckham Law special regime eligibility & application
- Autónomo quarterly filings (IVA, IRPF)
- Annual income tax return (IRPF)
Questions about this service
Do I charge IGIC or IVA to a client on the mainland?
It depends on what you supply and to whom, and it is the question that most often gets answered wrongly by copying a mainland invoice template. Because the Canaries are outside the VAT territory, a supply from Tenerife to Madrid is not the same as one from Valencia to Madrid. Get this confirmed before you issue invoices, not after a client's accountant queries one.
Is the ZEC worth looking at for a small business?
Sometimes, but it is not a default. The ZEC carries minimum investment and job-creation commitments and is designed for substantive operations, so for a one-person consultancy it usually is not the answer. A partner tax advisor will tell you honestly whether you clear the bar before anyone starts an application.
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