The IGIC retailers' regime: why a Canary shop sells without charging IGIC

A woman from Bologna opens a souvenir shop in Corralejo, on Fuerteventura, in 2025: postcards, ceramics, sun hats, bottles of local wine she buys from a wholesaler in Las Palmas and a line of printed T-shirts she has made in Madrid and shipped over. Her accountant on the mainland asks for the IGIC she charges on sales, and she has not charged any; the wholesaler's invoices carry 7 % IGIC that she has been treating as recoverable, and it is not; the T-shirts arrived with a customs bill that included a line nobody could explain, 0.7 % of the value, on top of the 7 %. Nothing has gone wrong. She is a comerciante minorista under the Canary indirect tax, a status the law assigns, not one she chose, and it comes with its own exemption, its own surcharge, its own census boxes and its own two words on every invoice. This article sets out the regime as it stands on 21 October 2026: who is a retailer and who is not, what the exemption covers, what it does to purchases and imports, how a shop enters and leaves the regime, what the invoice must say and why a hotel buying from the shop still gets a deduction, and the arithmetic of the Corralejo shop.

An exemption that is not a choice

The Canary Islands sit outside the EU's VAT area and run the Impuesto General Indirecto Canario instead, a tax whose exemptions, rates and special regimes the regional parliament writes; the state act, Ley 20/1991, now says of exemptions only that Las exenciones en operaciones interiores de este impuesto se regulan en el artículo 50 de la Ley, de la Comunidad Autónoma de Canarias, 4/2012, and since 21 October 2025 that regional article lives in the consolidated text approved by Decreto Legislativo 1/2025, whose article 27 is the one that matters here. Its first sentence: Están exentas del Impuesto General Indirecto Canario las entregas de bienes que, en el desarrollo de su actividad comercial, efectúen los sujetos pasivos que tengan la consideración de comerciantes minoristas. The retailer does not charge IGIC on what it sells in the shop. The same article draws the edge at once, La exención no se extiende a las entregas de bienes y prestaciones de servicios que realicen dichos sujetos al margen de la referida actividad comercial, so the shop's gift-wrapping service, the commission it earns on excursion tickets or the sale of its old van are taxed as anyone else's, and it closes with the sentence that makes the regime what it is: retailers estarán incluidos con carácter obligatorio en el régimen especial de comerciantes minoristas. Article 68 repeats it for the regime itself, which se aplicará obligatoriamente a los sujetos pasivos del Impuesto General Indirecto Canario que por el desarrollo de su actividad comercial tengan la consideración de comerciante minorista. There is no box to tick and no waiver; a shop that meets the definition is in, with the exemption and everything that comes attached to it, and a shop that does not meet it is out, however much it would like the simpler life. The difference from the mainland is worth stating, because most owners arrive with the VAT model in their heads: the IGIC retailers' regime exempts the retailer's sales outright, where the Spanish VAT equivalence surcharge keeps the retailer charging VAT and loads the surcharge onto its purchases instead; our comparison of IGIC and VAT sets out the two systems side by side.

Who is a retailer: the two tests and the list of things that are not transformation

Article 27.2 defines the retailer with two tests, both of which must be met. The first is about what is sold: the taxpayer must be one of those Que realicen con habitualidad ventas de bienes muebles o semovientes sin haberlos sometido a proceso alguno de fabricación, elaboración o manufactura en Canarias, por sí mismos o por medio de terceros. Goods, not services; movable goods, not property; and goods sold as they were bought, without manufacturing, elaborating or processing them in the islands, whether in the shop's own back room or through a workshop it pays. The second is about to whom: the sum of the consideration for those goods delivered from establishments in the Canary Islands, during the preceding year, to persons who are not entrepreneurs or professionals, or to the Social Security, must have hubiera excedido del 70 por ciento del total de las realizadas. More than 70 % to final consumers, measured on the previous calendar year, and with a rule that catches the shop selling to companies: las entregas de bienes a las personas jurídicas se consideran en todo caso realizadas a empresarios o profesionales, so every sale to an S.L., an association or a hotel company counts on the business side whatever the goods are for. A shop in its first year has no preceding year to measure, and the article settles it by the tax-register heading: Si el sujeto pasivo debe darse de alta en epígrafes de comercio al por menor en el Impuesto sobre Actividades Económicas, se presume que durante el año de inicio de la actividad comercial dispone de la consideración de comerciante minorista, and the mirror image, Si se debe dar de alta en algún epígrafe de comercio al por mayor, se presume que durante el año de inicio de la actividad comercial no dispone de la consideración de comerciante minorista. The heading chosen on the day the business is registered decides the first year's IGIC.

The first test has a list attached, because almost every shop does something to its goods before selling them. Article 27.2.3.º says which operations are not transformation and do not cost the status: Las de clasificación y envasado de productos, the placing of brands or labels and the preparation and cutting before delivery, El lavado, desinfectado, desinsectado, molido, troceado, astillado, descascarado, descortezado y limpieza de productos alimenticios and in general the acts of mere conservation such as pasteurising, chilling, freezing, drying and packaging, the chilling, freezing, portioning or gutting of fresh meat and fish, the making and hanging of curtains, and La simple adaptación de las prendas de vestir confeccionadas por terceros. A greengrocer who washes and bags, a fishmonger who guts and fillets, a boutique that takes up a hem and a wine shop that gift-boxes its bottles all stay retailers; the T-shirts printed in Madrid stay retail goods too, because the printing was done by a third party outside the Canary Islands and the test is about transformation in the islands.

Who is not: the baker, the restaurant, the wholesaler and the online seller

The list is where the status is usually lost. A bakery that bakes is manufacturing in the islands, so its bread is not a retail delivery and it charges IGIC like any producer; a shop that roasts its own coffee, a workshop that assembles the jewellery it sells, a kitchen that cooks are all out, for those goods. A restaurant or a bar is a provider of services, not a seller of goods, and never comes near the regime. A shop that sells 40 % of its turnover to hotels and tour operators fails the second test and charges IGIC on everything from the following 1 January, with the deduction right that comes with it. A wholesaler is out by definition and by heading. And the test counts deliveries from establishments in the Canary Islands to non-entrepreneurs wherever they live, so the shop that sells online and ships to the mainland keeps those sales in the computation on the consumer side, but what it ships to a business in Valencia counts against it, and what it sends out of the islands may have its own export treatment that this article does not cover. One refinement exists for the trader who is not a retailer but still sells to the public: article 27.1 exempts those deliveries too, but only in part, Esta exención se limitará a la parte de la base imponible de estas entregas que corresponda al margen minorista que se incluya en la contraprestación, a margin-only exemption valued against the trader's own sales to retailers, which in practice concerns wholesalers with a counter and is a question for an advisor, not a shop.

A business with several activities applies the test to its commercial activity and the regime to that activity alone. The shop that is also a small café runs two activities: the goods it resells unaltered are exempt retail deliveries, the coffee it serves is a taxed service, and the IGIC on what it buys for each has to be kept apart, because the tax treats them as different sectors. Ley 20/1991 says so when it lists what does not give a right to deduct, no originan el derecho a deducir las operaciones incluidas en el régimen especial de la agricultura y ganadería o en el régimen especial de los comerciantes minoristas, and the ten-per-cent-of-everything accountant on the mainland is wrong twice: there is no deduction of the shop's purchases, and there is a deduction of the café's.

What the regime does to purchases: no deduction, and a surcharge at the border

The exemption has a price, and it is paid on the way in. IGIC charged by a Canary supplier on the goods the shop resells is not recoverable: the retail activity gives no right to deduct, so the 7 % on the wholesaler's invoice is a cost that goes into the shelf price, which is why the law speaks of the IGIC implicit in the retailer's prices. Goods that come from outside the islands, from Madrid or Milan alike, are imports for IGIC, and the regime adds to the import tax a surcharge on the margin the shop will add. Article 70 says that imports by retailers of goods for sale in their commercial activity estarán sometidas a un recargo por el margen mayorista que se incorpore en la entrega posterior de tales bienes; it excepts what the shop does not trade in, Se exceptúan de lo dispuesto en el párrafo anterior las importaciones de bienes de cualquier naturaleza que no sean objeto de comercio por el referido comerciante minorista, so the till, the shelving and the delivery van are imported without it, and it puts the proof on the importer: La carga de la prueba de que un bien importado por un sujeto pasivo incluido en el régimen especial de comerciantes minoristas no está destinado a ser objeto de entrega en el desarrollo de su actividad comercial corresponde al propio sujeto pasivo importador. The base of the surcharge is the import base plus the island production tax: La base imponible del recargo será igual a la suma de la base imponible del impuesto general indirecto canario que grave la importación de los bienes y de las cuotas del arbitrio sobre importaciones y entregas de mercancías en las islas Canarias. The rates are a tenth of the IGIC rate of the goods: El tipo del 0,7%, para las importaciones sujetas al tipo general del 7%, 0.5 % for goods at 5 %, 0.3 % for goods at 3 %, 0.1 % for goods at the 1 % rate, 0.95 % and 1.5 % for the two increased rates of 9.5 % and 15 %, 2 % for the special rate of 20 % and zero for zero-rated goods. It is collected with the import tax, La liquidación y recaudación del recargo se efectuará conjuntamente con el impuesto general indirecto canario que grave las importaciones de bienes, which means on the customs declaration the forwarder or the courier files, the DUA that our article on buying from outside the islands explains line by line. The state act used to carry this surcharge in its article 58 bis; that article has been empty since 2023 and the rule now lives, with its rates, in the Canary text.

Entering and leaving: the modelo 400, the modelo 424 and the stock

The regime has dates. A business already trading that comes to meet the definition is in from the start of the year, se entiende que la fecha de inclusión es el día 1 de enero; a business that starts as a retailer is in from the day its census declaration says the commercial activity begins; one that ceases to meet the definition is out from 1 January, and one that stops trading is out when it says so, La fecha de exclusión será la de efectos de la declaración censal que están obligados a presentar comunicando el citado cese. Three obligations follow from inclusion. The first is the census: article 70 lists La obligación de presentar la declaración censal de comienzo o de modificación comunicando la inclusión en el régimen especial de comerciantes minoristas, the modelo 400, which under article 31 of the Canary management regulation goes in within one month of the inclusion date, and whose exclusion counterpart has the same month, La comunicación de exclusión en el régimen especial de comerciantes minoristas debe efectuarse a través de la declaración censal de modificación, siendo el plazo de presentación el de un mes desde la fecha de exclusión. The modelo 400 is not optional for anyone in business in the islands: since 2024 the Agencia Tributaria Canaria's own page says that se incluyen en esta obligación los que realicen exclusivamente operaciones exentas del artículo 50.Uno de la Ley 4/2012, and the regulation's article 132 says the same, La obligación prevista en el párrafo anterior alcanza también a las personas o entidades que realicen exclusivamente operaciones exentas; a company born through the single electronic document is excused the start and cease declarations only, La presentación del DUE exonera de la obligación de presentar las declaraciones censales de comienzo o cese de la actividad ante la Agencia Tributaria Canaria, a rule the regulation received in August 2026.

The second obligation is the stock. A business that enters the regime with goods on its shelves owes, on their value, La obligación de presentar una autoliquidación en la que se declare e ingrese la cuota tributaria resultante de aplicar el tipo impositivo y el tipo del recargo, the IGIC rate plus the surcharge rate on the stock held for resale at the inclusion date, whether the goods were imported or bought in the islands and whether or not their IGIC was deducted: the regime assumes the business deducted it before and takes it back. That self-assessment is the modelo 424, due under article 30 of the regulation within one month, deberá presentarse en el plazo de un mes desde la fecha de inclusión en el régimen especial de comerciantes minoristas, and the Agencia's page puts the model's two faces in one sentence, El modelo 424 tendrá la consideración de autoliquidación en el caso de inclusión y de declaración en el caso de exclusión. It is filed even when nothing is owed, Están obligados a presentar esta autoliquidación, aunque no contenga cuota tributaria a ingresar, with one exception that covers most new shops: esta autoliquidación no debe presentarse cuando se comience la actividad comercial y el sujeto pasivo no viniera desarrollando otras actividades empresariales o profesionales. The Corralejo shop, new to business, files a modelo 400 and no 424. The third obligation is on the way out: a retailer excluded from the regime recovers the tax on the stock it holds at that date, Tener derecho a la deducción, en el porcentaje correspondiente al sector diferenciado al que se afecten los bienes muebles o semovientes, computed at the IGIC rate plus the surcharge rate on the stock's value, and the Agencia's page adds the sequence: el sujeto pasivo que desee ejercer el derecho a la deducción deberá presentar este modelo antes del ejercicio del derecho.

The invoice: two words that cost €30 each when missing, and the buyer's deduction

Every invoice the shop issues for goods sold in its commercial activity carries a mention. Article 70 requires that se deberá incluir, sin perjuicio de otras menciones, la expresión «comerciante minorista», and Ley 20/1991 makes the omission an infringement of its own: Constituye infracción tributaria la expedición de facturas por los sujetos pasivos incluidos en el régimen especial de comerciantes minoristas sin que en las correspondientes facturas figure expresamente consignada su condición de tales, graded as serious and sanctioned with a multa pecuniaria fija de 30 euros por cada una de las facturas emitidas sin hacer constar la condición de comerciante minorista. A shop that invoices a hotel forty times a year without the two words has a €1,200 problem waiting for the first review. The mention is not a formality for its own sake. It is what lets a business customer recover the tax hidden in the price: Ley 20/1991 says that buyers from retailers podrán deducir la carga impositiva implícita del Impuesto General Indirecto Canario correspondiente a la contraprestación de esas operaciones, siempre que los comerciantes minoristas hayan hecho constar en su factura la condición de tales, and it fixes the arithmetic, El valor del referido coeficiente se obtendrá multiplicando 0,7 por el tipo de gravamen, expresado en tanto por uno, que se aplicaría a las entregas de bienes correspondientes en el supuesto de no estar exentas. For goods at the general rate the coefficient is 0.7 × 7 ÷ 100, which is 4.9 % of the price paid: the hotel that buys €1,000 of merchandise from the shop deducts €49 in its own quarterly return, as if the shop had charged it, and the deduction is born when it receives the invoice, en el momento en que el empresario o profesional que las soportó reciba la correspondiente factura o demás documentos justificativos del derecho a deducir. The shop sells without IGIC; the hotel deducts anyway; the Treasury has already been paid upstream. That is the whole design, and the two words are its hinge.

Returns: none quarterly, one occasionally

The regime also takes away the quarterly form. Ley 20/1991 lists among a taxpayer's duties the periodic returns and the annual summary and then carves the retailer out: En ningún caso esta obligación incumbirá a los sujetos pasivos acogidos al régimen especial de comerciantes minoristas por las actividades comprendidas en dicho régimen. For the shop's own activity there is no modelo 420 and no annual summary; the shop that also runs a café files for the café. What remains is the occasional return, the modelo 412, for the quotas a non-filer must nevertheless declare. The Canary regulation lists first Los empresarios o profesionales que no están obligados a presentar autoliquidaciones periódicas, cuando tengan la obligación de declarar una cuota devengada del Impuesto General Indirecto Canario, and the commonest case for a shop is the reverse charge: when the shop buys a service from outside the islands, the design subscription, the web hosting, the advertising platform, it is the taxable person for the IGIC on that purchase and declares it itself, and the regulation says how, Si el empresario revendedor tiene la condición de comerciante minorista y no está obligado a presentar autoliquidaciones periódicas, declarará, como sujeto pasivo por inversión, las cuotas devengadas a través de la autoliquidación ocasional. The Agencia's page gives the deadline: El modelo 412 se deberá presentar durante el mes natural siguiente a la finalización del periodo de liquidación mensual. The quota paid that way is not deductible for the retail activity either; it is one more cost of the exemption. The travellers' refund is the other document the shop may meet: a non-resident visitor who takes goods out of the islands can recover the tax implicit in the retail price, and the shop that sells to one deberá expedir, en el mismo momento de la entrega, la correspondiente factura y un documento electrónico de reembolso (DER) through the Agencia's e-office, the scheme that the IGIC comparison article mentions under its DIGIC name.

The small-business regime and the retailers' regime: which one wins

Owners who are individuals hear of a second exemption, the régimen especial del pequeño empresario o profesional, the REPEP, for those whose turnover in the previous year no hubiera excedido de 30.000 euros, and ask whether a small shop is in one or the other. It is in both, for different things. Article 90.2 says the small-business regime never applies to Las entregas de bienes que, en el desarrollo de su actividad comercial, realicen los sujetos pasivos acogidos al régimen especial de comerciantes minoristas, sin perjuicio de su aplicación a las prestaciones de servicios u otras entregas de bienes realizadas al margen de dicha actividad comercial. The goods on the shelf are exempt as retail deliveries whatever the turnover; the shop's services and its sales outside the commercial activity are exempt under the REPEP only while the owner is an individual below the threshold who has not waived it, and taxed otherwise. A retailer organised as a company has no REPEP at all and is still exempt on its goods. Our article on the small-business regime covers the threshold, its rise from 2027 and the waiver; for the shop, the two regimes sit side by side and the retail goods belong to this one.

Worked example: a souvenir shop in Corralejo

The shop registered in 2025 under a retail heading, so it was presumed a retailer in its first year. In 2025 it sold €180,000 of goods to tourists and residents and €30,000 to hotels and a tour operator that buy welcome packs; 85.7 % of its deliveries went to non-entrepreneurs, so it is a retailer in 2026 on the second test as well. In the year it bought €60,000 of goods from the Las Palmas wholesaler and imported €40,000 of T-shirts from Madrid.

If the shop had come from a year selling mostly to hotels, it would have entered the regime on 1 January with a modelo 424 on its stock: on €20,000 of imported T-shirts held that day, 7 % plus 0.7 % is €1,540, paid within the month. And if in 2026 the hotel contracts grow until the business side passes 30 % of deliveries, the shop leaves the regime on the following 1 January, recovers the tax on the stock it holds that day through the same model, and starts charging IGIC and filing the modelo 420 like any other seller.

Ten things to check before the first sale, or at the year's turn

• The heading. Register the activity under a retail heading of the Impuesto sobre Actividades Económicas if the business is a shop, because the heading decides the first year's status; a wholesale heading presumes the opposite.
• The two tests. Each January, measure the previous year's deliveries of goods: the share to non-entrepreneurs must exceed 70 %, and sales to any company count as business sales whatever the use.
• The transformation line. Washing, bagging, labelling, cutting, portioning, freezing, hemming and gift-boxing keep the status; baking, roasting, cooking, assembling and any manufacture in the islands lose it for those goods.
• The modelo 400. File it within one month of inclusion or exclusion, and in any case before trading, with the retailer box marked; it is compulsory even for a business whose operations are all exempt.
• The modelo 424. A business entering the regime with stock pays the IGIC rate plus the surcharge rate on that stock within one month; a shop starting from nothing files no 424; a business leaving the regime files it to recover the tax on its stock before deducting.
• The invoices. Print «comerciante minorista» on every invoice for goods sold in the activity, including to consumers who ask for one; each invoice without it is a €30 fine and a customer without a deduction.
• The purchases. Book the IGIC on purchases for resale as a cost, never as input tax; keep the café's or the services' purchases in their own sector, where the deduction exists.
• The imports. Expect the surcharge on every customs declaration for goods to be resold, at a tenth of the goods' rate, and none on equipment; keep the proof that the van or the till was not for sale.
• The reverse charge. Services bought from suppliers outside the islands are declared on a modelo 412 in the month after the invoice, with no deduction for the retail activity.
• The exit. When the business side passes 30 % of deliveries, or the shop starts manufacturing, plan the 1 January exit: the stock deduction, the first modelo 420 and the IGIC on the price list.

What our advisory desk does

Our tax advisory desk in Caleta de Fuste and Costa Calma sets a shop up on the right side of the regime before the first invoice: the heading, the modelo 400 with the retailer box, the modelo 424 when there is stock, the invoice template with the two words, and the bookkeeping that keeps the retail purchases as cost and the café's as input tax. Each January it runs the 70 % test on the previous year's sales and tells the owner whether the status holds, files the census change and the stock model when it does not, and handles the modelo 412 whenever a foreign platform is paid. For an owner arriving from the mainland or from abroad, the first meeting is usually spent unlearning VAT. Book a consultation and bring the IAE registration, the supplier invoices and the customs bills.

Common questions

My shop does not charge IGIC. Is that legal?

It is compulsory. A retailer under the Canary indirect tax, a business selling movable goods it does not transform in the islands, with more than 70 % of the previous year's deliveries to non-entrepreneurs, is exempt on those sales by article 27 of the Canary consolidated text and is included in the retailers' special regime whether it likes it or not. The price is that the IGIC on its purchases is a cost and its imports carry a surcharge.

Can I deduct the IGIC my wholesaler charges me?

No, for the goods you resell: the retail activity gives no right to deduct, and the tax on the wholesaler's invoice is a cost that goes into your prices. If you also run a taxed activity, a café, a repair service, a commission business, the IGIC on what you buy for that activity is deductible in its own sector, and you file quarterly for that activity only.

Why does my customs bill show 0.7 % on top of the 7 %?

Because you are a retailer importing goods for resale: article 70 of the Canary text puts a surcharge on those imports, at a tenth of the goods' IGIC rate, on the import base plus any island production tax, collected with the import IGIC on the customs declaration. Equipment you are not going to sell carries no surcharge, and the burden of proving that a good was not for sale is yours.

A hotel wants an invoice with IGIC and I cannot charge it. What do I give them?

An invoice without IGIC that states «comerciante minorista». With those words the hotel deducts the tax implicit in your price, 0.7 times the rate the goods would carry, 4.9 % of what it paid for goods at 7 %; without them it deducts nothing and you owe €30 per invoice. The mention is required on every invoice for goods sold in the activity.

I sell online and ship to the mainland. Am I still a retailer?

The test counts deliveries from your establishments in the Canary Islands to non-entrepreneurs, wherever they live, against the total, and sales to companies count as business sales. Online sales to individuals keep you on the consumer side; a growing share of orders from businesses can take you out from the next 1 January. Goods sent out of the islands have their own export rules, which this article does not cover.

Facts verified in October 2026 (Decreto Legislativo 1/2025 of the Canary Islands, articles 27, 68, 69, 70, 89 and 90, in the version in force on 21 October 2026; Ley 20/1991, articles 10, 29, 33, 34, 59 and 63; Decreto 268/2011, articles 2, 11, 30, 31, 58 and 132, as consolidated with Decreto 126/2026; the Agencia Tributaria Canaria's pages and instructions on the modelos 400, 412 and 424). The thresholds and rates are the ones in force at that date; a shop's status is measured every year on the previous year's figures, and the example is illustrative.