Thousands of self-employed workers across the Canary Islands could soon benefit from reduced tax and administrative burdens after a significant change to the region’s tax rules has been officially published in Spain’s Official Bulletin (BOE).
The measure, included in a new decree approved by the Canary Islands Government, increases the eligibility threshold for the Special Regime for Small Businesses and Professionals (REPEP) under the Canary Islands’ IGIC tax system.
From 1st July 2026, the annual turnover limit will rise from €30,000 to €50,000, allowing many more freelancers and self-employed professionals to access the simplified tax scheme.
Under the REPEP system, eligible businesses do not charge IGIC (the Canary Islands equivalent of VAT) on their invoices. However, those who join the scheme are also unable to reclaim IGIC paid on business expenses, purchases or investments.
Who can benefit?
The new rules will apply to self-employed individuals based in the Canary Islands whose total turnover during 2025 did not exceed €50,000.
The measure is particularly important for freelancers who were previously excluded because they earned more than the old €30,000 limit but remained below the new €50,000 threshold.
According to the Agencia Tributaria Canaria, eligible professionals wishing to join the scheme must apply between 1st and 31st July 2026.
From 1st January 2027, the €50,000 threshold will become the standard limit for all future applications to the regime.
Simpler tax administration
The Canary Islands Government says the change is designed to reduce bureaucracy and ease the administrative burden on smaller businesses and sole traders.
Officials estimate that as many as 11,000 self-employed workers across the archipelago could benefit from the reform.
For many freelancers, not having to charge IGIC on invoices could significantly simplify their dealings with the tax authorities. However, experts warn that the system will not be advantageous for everyone.
Businesses that regularly purchase equipment, materials or services may find remaining in the standard system more beneficial because it allows them to reclaim IGIC paid on those costs.
Part of wider economic support measures
The tax reform forms part of a broader package introduced by the Canary Islands Government in response to the economic impact of the ongoing crisis in the Middle East, which has contributed to higher energy, fuel, transport and essential goods costs.
Regional authorities argue that nationwide support measures do not always fully address the unique challenges faced by the Canary Islands due to their geographical isolation and special economic and fiscal status.
The Government estimates the self-employed tax measure will cost around €12.5 million this year as part of a wider package of economic support and tax relief initiatives aimed at protecting businesses and households from rising costs.
