Taxes in the Canary Islands
Guide for VAT Numbers, Companies and Pensioners
CANARY TAX AUTHORITIES: Fuerteventura, one of the beautiful Canary Islands, is a place not only renowned for its beaches and mild climate, but also for an advantageous tax system.
Many entrepreneurs, freelancers and retirees choose this island as a residence to benefit from a favorable tax regime.
In this article, we will explore taxation in Fuerteventura, divided into categories: VAT numbers, Companies and Pensioners.
This is because the tax system of the Canary Islands is very interesting.
Taxation for VAT numbers
Registration and Tax Obligations
Opening a VAT number in Fuerteventura is a relatively simple process.
Here are the main steps:
- Mercantile Registry: You must register with your local Mercantile Registry.
- Opening License: Obtaining an opening license, which varies depending on the activity carried out.
- VAT: Value Added Tax (IGIC – Impuesto General Indirecto Canario) in the Canary Islands is 7%, lower than in mainland Spain.
Taxes and Contributions
Freelancers in Fuerteventura must consider the following taxes and fees:
- Personal Income Tax (IRPF): Taxation is progressive, with rates ranging from 19% to 45%.
- Social Contributions: Mandatory for all self-employed workers.
The cost varies according to income and personal situation.
Tax Advantages
- Canary Islands Regime (REF): The Canary Islands enjoy a special tax regime that includes a reduction in IRPF for residents.
- Investment Deductions: Possibility of deducting a part of the investments made on the island.
Taxation for Companies
Incorporation of a Company
Setting up a company in Fuerteventura can be beneficial for various tax reasons.
The main types of companies are:
- Sociedad Limitada (SL): Similar to the Italian limited liability company.
- Sociedad Anónima (SA): Similar to the Italian S.p.A.
Corporate taxation
Companies face the following taxes:
- Corporate Tax: The standard rate is 25%, but there are specific tax incentives for the Canary Islands.
- IGIC: At 7%, with reductions and exemptions for certain categories of goods and services.
Tax Incentives for Companies
- Zona Especial Canaria (ZEC): A special tax regime that provides for reduced taxation (4%) for companies that set up in certain areas.
- RIC (Reserva para Inversiones en Canarias): An incentive that allows companies to reduce corporate tax by reinvesting profits in the Canary Islands.
Subsidies for Start-Ups
Fuerteventura is particularly attractive for technological and innovative start-ups, thanks to:
- Advanced technological infrastructures: Presence of technological hubs and incubators.
- Funding and grants: Availability of local and European funds for innovation.
Taxation for Pensioners
Tax Residency
For retirees, becoming tax residents in Fuerteventura requires:
- Registry registration: You must register as a resident at your local town hall.
- Proof of Residency: Prove that you reside on the island for more than 183 days a year.
Taxation of Pension Income
Retirees should be aware of the following taxes:
- IRPF: The pension is taxed at Spanish progressive rates, with some deductions for Canary Island residents.
- Double Taxation Conventions: Spain has agreements with many countries to avoid double taxation of pension income.
Tax Advantages for Retirees
- Reduced Rates: Retirees residing in the Canary Islands benefit from reduced tax rates compared to the rest of Spain.
- Specific Deductions: Possibility of additional deductions for medical expenses and other relevant costs.
Health care
One of the main benefits for retirees is access to a high-quality healthcare system:
- Public Health: Availability of efficient and free public health services for residents.
- Private Healthcare: Numerous private hospitals and clinics offer high-quality services.
Canary Islands taxation: summary
CANARY TAX AUTHORITIES: Fuerteventura offers a favorable tax environment for different categories of residents, from freelancers to companies and retirees.
The mild climate, natural beauty, and advantageous tax regime make this island an attractive option for anyone looking for improved quality of life and tax advantages.
Here is the official website of the Canarian Tax Agency
Practical advice
- Tax Advice: It is advisable to consult with a local tax expert to optimize your tax situation.
- Regulatory Updates: Tax laws can change, so it’s important to stay up-to-date on the latest regulations.
In conclusion, moving to Fuerteventura can be a strategic choice for both entrepreneurs and retirees thanks to the advantageous tax regime and high quality of life.
However, it is essential to get properly informed and, if necessary, get assistance from professionals in the field to maximize the tax benefits offered by the island.
QUESTIONS
If you ask yourself questions like this:
How much do you pay taxes in the Canary Islands?
How much does an Italian pensioner pay in taxes in the Canary Islands?
We recommend that you contact a specialist who you find in the Accountants and Lawyers section
Tag
- Canary Islands Tax
- Taxation Fuerteventura
- Canary Islands tax advantages
- Taxation of pensioners in Fuerteventura
- Canary Islands VAT number
- Fuerteventura Businesses
