On 31st December 2018, the Canary Islands 2019 General Budget was published. It provides that as of 1st January 2019, the Canary Islands’ standard rate of General Indirect Tax (IGIC), which is the equivalent of a value added tax in other jurisdictions, is reduced from 7% to 6.5%.
In addition, the budget makes the following changes to IGIC:
- Supplies of domestic electricity and social health care are exempt from IGIC; and
- The application of the zero rate is extended to special breads, olive oils including olive pomace and different types of pasta.
Before 1st January 2019, these supplies were taxed at the 3% reduced rate of IGIC.