The IGIC is a type of indirect general tax that is applied to the Canary Islands (Spain)
They receive a differentiated fiscal treatment due to their insular status, this legal privilege was established in the 16th century, when it was incorporated into the crown of Castile.
The IGIC (Canarian Indirect General Tax) this differential treatment of the consumption tax, which was introduced for the first time under this name in Law 20/1991.
The law modifies the fiscal aspects of the economic and fiscal system of the Canary Islands.
Where is the IGIC applied?
The IGIC is an indirect tax which is implicit in the consumption of up to 12 nautical miles in the Canary Islands, territorial waters and their airspace.
This is a transcript of the value added tax used in the Peninsula and the Balearic Islands. The difference is that your tax rate is much lower.
The general tax rate of IGIC is similar to VAT, below we will explain in detail what percentages are applied in different types of tax.
7% (January 2020) and the reduced tax rate is 3%. Also, certain services and products have different tax rates: zero tax rate (0%), increased tax rate (9.5% and 15%), and special tax rate (20%).
Billing with the IGIC?
As in the Peninsula, the IGIC (not the value added tax) is used to issue invoices in the Canary Islands.
However, due to its close commercial relationship with the peninsula, commercial transactions between it and the Canary Islands are usually exempt from indirect taxes (IGIC and value added tax).
However, professionals and companies that issue invoices to the Canary Islands must take into account certain aspects:
If the recipient of the product is an individual in the Canary Islands, VAT must be paid on the invoice.
For the telecommunications, radio and television services provided to specific Canary Islands, IGIC must be used.
Disable the rule. Certain services provided by the Canary Islands (finance, advertising, consulting, auditing, engineering, etc.) must issue invoices for value added tax because their development and use are considered peninsular.
Formal and tax obligations
The first obligation of a self-employed worker is a census before starting to carry out commercial or professional activities of the IGIC.
It must be completed by completing form 400 and before the Canary Islands Public Treasury. Regardless of whether it is necessary to provide Model 036 of the National Census Registry (or its simplified version 037).
You should also use it as a template for modifying the return when any identifying data or any other data entered in another return that you have previously started or modified changes.
As a declaration of termination, it will only be made when the taxpayer’s entire business or professional activity ceases or for any other reason should not be part of the business or professional census.
After the event launch, tax settlements must be submitted quarterly in two modes according to your payment method:
- Model 420 for the general regime
- Model 421 for the simplified regime
- First trimester. From April 1 to 20, both inclusive.
- Second trimester. From July 1 to 20, both inclusive.
- Third trimester. From October 1 to 20, both inclusive.
- Fourth trimester. From January 1 to 30, both inclusive.