Canary Islands launch new ‘tax-free’ system

by Lorraine Williamson
'tax-free’ system

LAS PALMAS – This Monday the new ‘tax-free’ system of the Canary Islands is launched. This system allows the return of the Canary Islands Indirect General Tax (IGIC) of their purchases to tourists from third countries like the United States and the British after Brexit 

However, the system does not have the approval of merchants or from the Minister of Tourism of the Islands, Yaiza Castilla. The counsellor has agreed with the merchants, who consider that the new system “is doomed to failure.” It is implemented with a digital methodology for the first time in the Canary Islands. Furthermore, the tax-free system has been promoted by the Canary Islands Tax Agency, dependent on Román Rodriguez.  

As the newspaper, Canarias 7 has learned, Castilla’s objective is to modify it again, after the regional elections (May 2023). She wants to implement a system similar to the one carried out in the state. In the rest of Spain the DIVA system is applied, considered one of the best in Europe and which gives the visitor the option to choose: 

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  • If a tourist prefers that the Tax Agency (AEAT) manage it, he or she will receive 100% of the amount a few months later.  
  • If an operator specialising in ‘tax-free’ handles it, they will charge tourists a commission of more than 27%. Consequently, the tourist receives the money instantly. 

However, the Canary Islands Tax Agency want the autonomous community to be solely responsible for returning the taxes to tourists, paying 100% of the amount within a period of six months. The commercial sector argues that the tourist prefers to receive the money immediately. 

“The only thing left for me is to wait to see the results of the system and then, with them, have more weighty arguments to change it,” Castilla has sentenced. 

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