What is IGIC and how is it declared?

[jrineakter]

The differences between the Canary Islands and the rest of the autonomous communities of Spain do not end with the time zone; the islands also have a different tax regime than the mainland, the so-called IGIC (General Indirect Canary Tax).


What is IGIC?
Once the acronym has been clarified in the previous paragraph, it should be said that the IGIC is an indirect tax that taxes the delivery of goods and services made in the Canary Islands, as well as imports made in the island territory.

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Perhaps this can be better understood with a comparison: IGIC is the substitute for VAT in the Canary Islands, since it performs the same function as this tax in the mainland, but, although its intention is equivalent, IGIC presents some differences with respect to the value added tax. Let's see what they are:

To begin with, the Canary Islands tax has lower tax rates than VAT, meaning that the tax burden is lower for each good or service purchased. On the other hand, while VAT has the three known types of regimes (general 21%, special 10% and equivalent 4%), the Canary Islands tax has five different regimes. These are the zero rate (0%), the reduced rate (3%), a general rate lower than that of the peninsula (7%), the increased rate (9.5%), the increased special rate (13.5%) denmark number data and the highest, some special rates that range between 20% and 35%.

Likewise, goods and services brought to the Peninsula from the Canary Islands fall into the import category, and are therefore exempt from IGIC. However, the buyer of the product must pay a VAT tax corresponding to the imported product at customs. Therefore, IGIC is not paid, but VAT is.

Finally, there is a special case, that of the retail trader: this sector is not affected by the IGIC for the provision of services, but, on the other hand, the equivalence surcharge is applied to them or, in other words, the surcharge on imports.

IGIC: settlement and declaration
The calculation of the liquidation of this tax is relatively simple, it consists of subtracting the IGIC incurred from the IGIC charged, in the same way that the deductible VAT charged is subtracted from the VAT charged. In addition, the IGIC, like the VAT, is deducted quarterly, which means that 20 working days are allowed after the quarter to declare.