Tenerife has a different Economic
and Fiscal Regime (REF),  created to boost investment and trade on the island.

INDIRECT GENERAL
CANARY TAX (IGIC) 

This tax is equivalent to the Value Added Tax (VAT) in the mainland. In Tenerife, this indirect tax is much lower than the European average, namely only 7%.
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IGIC
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RIC

RESERVE FOR INVESTMENTS
IN THE CANARY ISLANDS (RIC)

The Reserve for Investments in the Canary Islands (RIC) is a fiscal benefit to encourage the self-financing of the investments in the companies that carry out their activity in the Canary Islands. This advantage allows to reduce the tax base of the Corporate Tax up to 90% of the undistributed profits. The investments must be used for the acquisition of fixed assets (initial investment new or used), creation of jobs, acquisition of patrimonial elements that do not constitute initial investment and in the subscription of shares or participations in companies for the constitution or expansion of their capital and in the Canarian public debt.

 

The reserves for investments must be materialized in a maximum period of three years and the fixed assets must remain 5 years in the company or less, depending on their useful life.

ZEC

For projects undergoing growth and / or expansion, the Canary Islands Special Zone (ZEC) represents an interesting option, because it is an economic instrument created to promote the development and boost the productive structure of the islands.

If your company inscribes to the ZEC, it will only pay 4% in Corporate Tax. This advantage will only be applied in the operations carried out on the island.

The requirements to become a ZEC company are the following:

• Present a report describing the project.
• It must be a newly created entity with fiscal address on the island.
• Make a minimum investment of 100,000 € in fixed assets within the first 2 years.
• Create at least 5 jobs within 6 months of registering, and maintain this average during the years in
which the company remains part of the ZEC.

• Having a company purpose matching any of the officially authorized activities.
• Have at least one administrator resident in the Canary Islands.

Belonging to the ZEC has many more advantages, which could be analyzed and explained in the framework of an advisory meeting.

THE BEST INCENTIVES FOR R & D, TECHNOLOGICAL AND AUDIOVISUAL INNOVATION THROUGHOUT
EUROPE

• R & D and Technological Innovation: Tenerife offers you a 45% deduction on Corporate Tax in all activities carried out in the Canary Islands that involve the development of new products or processes or provide significant improvements to the existing ones.

• 25% deduction for the acquisition of fixes assets: 25% of the amount of investments in new tangible fixed assets, excluding land, may be deducted from the full quota.

• Audiovisual industry: In Tenerife, Spanish productions benefit of a 45%-40% tax credit limited to 5.4 million euros. For foreign productions, the tax rebate is 40% with a limit of 4.5 million euros. This makes Tenerife one of the best places in Europe to welcome shootings, because the economic benefits are added to the climate, natural resources, varied landscapes and a solid audiovisual sector with the latest equipment and also qualified professionals with enough experience to assist any need.

• Rebates for the production of tangible goods: up to a 50% tax rebate on profits obtained from the sale of tangible goods produced in the Canary Islands as an incentive to industrial activities.

ZONA FRANCA  TENERIFE
(ZFT)

Tenerife has a Free Trade Zone, an area where companies can store, transform and distribute goods without having to pay levies, duties or indirect taxes. Tenerife Free Zone is located in the ports of Santa Cruz de Tenerife and Granadilla.

If your company needs to export or import part or all of its merchandise, you can enjoy one of the most beneficial tax regimes that exist in Europe for companies, even combining it with the ZEC.