IGIC is the Canary Islands' own sales tax, and at a general rate of 7 per cent in 2026 it is roughly a third of the 21 per cent IVA charged on the Spanish mainland. The letters stand for Impuesto General Indirecto Canario. It does the same job as VAT — it is added to almost everything you buy — but it is a Canarian tax, set in the Canaries, collected in the Canaries and spent in the Canaries.
The reason it exists is that the islands sit outside the European Union's VAT area. They are fully part of Spain and fully part of the EU, but for tax purposes they are treated as a separate territory, in the same category as a customs special zone rather than as another Spanish region. No EU VAT applies here at all, so the archipelago levies its own thing instead.
For a visitor this mostly shows up in small, pleasant ways: a bottle of decent rum, a camera lens or a restaurant bill quietly costs less than the same item would in Málaga or Madrid. It also has one practical consequence that catches people out at the airport, which is covered further down.
The rates, as they stand in 2026
IGIC is not a single number. It is a ladder of rates, and which one applies depends on what you are buying.
| Rate | Broadly applies to |
|---|---|
| Zero | Basic foodstuffs, water, books and newspapers, medicines, subsidised housing |
| 3% | Industry, mining, transport, telecommunications and some food |
| 7% (general) | Everything not listed elsewhere — the default |
| 9.5% | Certain vehicles and boats |
| 15% | Goods treated as luxuries, such as jewellery, furs and perfumery |
| 20% | Black tobacco |
Treat that table as a shape rather than a rulebook. Rates and the lists of goods attached to them are adjusted by the Canarian government in its annual budget, individual product categories move between bands, and 2026 brought a set of reclassifications rather than a change to the headline 7 per cent. If a specific rate matters to you — because you are importing a vehicle, or running a business here — check the Agencia Tributaria Canaria's own published tables rather than any travel guide, this one included.
The 7 per cent general rate is a residual one: it applies to anything the law has not specifically assigned somewhere else. That is why it covers such an odd mixture of things, from a haircut to a hire car's insurance to a laptop.
One genuinely odd 2026 wrinkle: your fizzy drink is taxed by sugar
Most sales taxes care what a thing is. The Canaries have started caring what a thing is made of. Sweetened soft drinks are now taxed on a sliding scale according to how much sugar they contain per 100 millilitres, climbing through the lower bands towards the general rate as the sugar content rises. Two bottles sitting next to each other in the same supermarket chiller can therefore carry different rates of tax.
You will never notice it at the till, because Spanish shelf prices are shown tax-inclusive. But it is a small, real example of how the islands use a tax they control to do things Brussels-set VAT could not, and it is the sort of detail that explains why Canarians defend the arrangement so firmly.
Why the islands have their own tax at all
This is not a modern EU concession. It goes back to a royal decree of 11 July 1852, pushed through by the Spanish prime minister Juan Bravo Murillo, which declared the Canarian ports puertos francos — free ports — and swept away duties on goods entering and leaving the archipelago.
The logic was geography. The islands lie a thousand miles from the mainland and just off the African coast; they could not compete with peninsular industry, they depended entirely on shipping, and they were in a bad way after the collapse of their earlier export crops. Making them a free port turned isolation into an advantage, and the decades that followed brought a genuine boom, much of it on the back of the cochineal dye trade that briefly made the islands rich.
That free-port principle survived into the modern Régimen Económico y Fiscal, the REF, the body of special economic and tax law that the Canaries retain within Spain and that the EU formally recognises for its outermost regions. IGIC, introduced in 1993 when Spain's VAT system could not simply be extended here, is the retail-facing part of it. The rest of the REF is corporate and investment law, and it is a large part of why the islands' economy looks the way it does — something set out in more detail in the page on how the islands earn their living today.
What it means when you are shopping
The saving is real but it is not dramatic, and it is smaller than the duty-free signage at the airport implies. On a 7 per cent tax against a 21 per cent one, a €100 mainland item ought to cost around €88 here if everything else were equal. Everything else is rarely equal: almost every manufactured good has been shipped 1,000 miles to get here, and freight eats into the gap.
Where you do see it clearly:
- Electronics, cameras and watches — the classic Canarian purchase, and the reason the shopping streets of Las Palmas and Santa Cruz have had specialist electronics dealers for generations. Prices are genuinely competitive, though not always better than a UK online retailer's, so check before you fly rather than after you land.
- Spirits, tobacco and perfume — the biggest gap of all, because on the mainland these carry high excise duty on top of 21 per cent VAT. Canarian rum, whisky and cigarettes are conspicuously cheap.
- Restaurants and bars — a lower rate on the bill is part of why eating out in the islands still feels reasonable compared with much of southern Europe.
- Fuel — petrol and diesel are treated very favourably here and cost markedly less than on the peninsula, which changes the arithmetic on hiring a car.
Where and what to shop for goes into the specifics of which goods are actually worth carrying home, and the running figures on what everyday things cost in the islands are the honest check on whether a "tax-free" sign means anything.
Cars, fuel and hire
Fuel is where the tax difference is most visible day to day. Filling a small hire car here costs noticeably less than the same fill on the mainland, and that changes how far it is sensible to drive — a full-day loop around an island is a cheap day out. The detail, including the habit of attendants filling the tank for you at no extra charge, sits on our page about filling up in the islands.
Vehicles themselves fall into the 9.5 per cent band rather than the general rate, which is one of several reasons cars are cheaper to buy here — and, indirectly, why hire rates are competitive. That said, a low tax on the vehicle does nothing about excess waivers and fuel policies, which is where the actual money goes; hiring a car in the Canaries covers the traps.
IGIC and what you can bring home
Here is the part that surprises people. Because the Canaries are outside the EU VAT and excise area, a flight from Tenerife or Lanzarote to the UK is treated for duty purposes like a flight from outside the EU — which is exactly why the airside shops are genuine duty-free shops and not the "duty-paid" ones you find on an intra-EU route.
Two consequences follow. First, you can buy at true duty-free prices before boarding. Second — and this is the trap — there are hard limits on what you may carry into the UK without declaring it, covering alcohol, tobacco and a cash value for other goods. Those limits are set by HMRC, they change, and the only sensible source is the government's own guidance on gov.uk. Our summary of allowances and what you can bring home walks through how they work in practice.
The same applies flying to mainland Spain. A Tenerife–Madrid flight is a domestic flight but a customs boundary, and allowances apply on arrival. People routinely buy four litres of rum in Puerto del Carmen and are surprised to be stopped in Barajas.
What IGIC does not do
It is not a tourist tax and there is nothing to pay on arrival. There is no VAT-refund scheme for visitors of the sort you find in mainland Spain, because there is no VAT to refund — the price you see already includes IGIC and you do not reclaim it at the airport. The currency is the euro, as it is across Spain, which catches out a surprising number of first-timers.
Nor does the low rate make the Canaries uniformly cheap. Resort seafronts price for resort seafronts, and a coffee in Costa Adeje costs what a coffee in Costa Adeje costs regardless of the tax band. Walk ten minutes inland and the same coffee halves. The broader picture of money and costs in the islands is more useful for budgeting than any single tax rate.
The short version
The Canaries charge their own 7 per cent IGIC instead of Spain's 21 per cent VAT, because a free-port settlement dating to 1852 survives in modern form as the REF. It makes alcohol, tobacco, fuel, electronics and eating out meaningfully cheaper, makes very little difference to sun cream and supermarket basics, and turns your flight home into a genuine duty-free run with genuine customs limits attached. Rates shift from budget to budget, so treat the figures here as 2026 framing and check the official tables if a specific purchase depends on it.