ELS-0026Money · Canary Islands

Canary Islands raises IGIC exemption threshold to €50,000: what autónomos need to know

Official sources checked
Written by Sue Berry
Practical guidance

The Canary Islands has increased the REPEP turnover threshold from €30,000 to €50,000. This could simplify IGIC for thousands of autónomos, but the loss of IGIC deductions means it will not suit every business.

The Quick Answer

The Canary Islands has increased the annual turnover threshold for the Régimen Especial del Pequeño Empresario o Profesional (REPEP) from €30,000 to €50,000.

REPEP allows eligible self-employed individuals and professionals established in the Canary Islands to issue qualifying Canary Islands invoices without adding IGIC.

There are two important dates:

1–31 July 2026: an exceptional application period for certain individuals whose total 2025 turnover did not exceed €50,000.

1 January 2027: the €50,000 threshold becomes the general REPEP limit.

To use the exceptional July 2026 option, eligible autónomos must submit Modelo 400 by 31 July 2026. Late applications will not take effect.

This is not a complete tax exemption. People in REPEP generally cannot reclaim the IGIC paid on business purchases and still have invoicing, record-keeping and reporting responsibilities.

Why This Matters

Who may qualify?

REPEP is primarily for an empresario o profesional persona física: an individual self-employed person or professional.

You will generally need to:

Operate as an individual rather than through a company.

Be established in the Canary Islands.

Remain within the relevant turnover limit.

Include turnover from all your business and professional activities.

Complete the required census notifications.

Companies, associations, foundations, communities of property and other legal entities cannot normally use REPEP.

A non-resident holiday-let owner does not qualify simply because the property is in the Canary Islands. The existence of a genuine permanent establishment may need to be considered.

The possible benefits

Qualifying Canary Islands invoices can be issued without adding IGIC.

Fewer regular IGIC returns may be required.

Quarterly administration may be reduced.

Pricing may be simpler for businesses serving private customers.

Cash flow may be easier to understand because IGIC is not collected from customers and held for a later return.

The possible disadvantages

IGIC paid on business expenses is generally not deductible.

The scheme may not suit anyone planning to buy equipment, improve premises or make another substantial investment.

The €50,000 figure relates to turnover, not profit.

Turnover from multiple activities may need to be combined.

Transactions outside the Canary Islands may still be subject to IVA or other tax rules.

Some annual, occasional and information returns may still be required.

The best choice depends on your customers, expenses, investments and the location of your transactions. It should not be made from the €50,000 headline alone.

Frequently asked questions

Does the €50,000 threshold apply immediately to everyone? Not in exactly the same way. There is an exceptional application period from 1 to 31 July 2026 for certain eligible individuals based on their 2025 turnover. The €50,000 threshold becomes the general REPEP limit from 1 January 2027.

Does REPEP mean I do not have to pay tax? No. REPEP concerns the IGIC treatment of qualifying operations. Income tax, autónomo social-security contributions and other reporting or payment obligations may still apply.

Can I reclaim the IGIC paid on my business purchases? Generally, IGIC connected with REPEP-exempt activities is not deductible. This is one of the main disadvantages and should be considered before joining.

Do I still need to issue invoices? Yes. Relevant invoices should normally contain the wording “Exención franquicia fiscal”. Invoice, record-keeping and certain reporting responsibilities continue.

Can a holiday-let owner use REPEP? Possibly, but not simply because the property is in the Canary Islands. Residence, permanent establishment, business structure, resources, turnover and the nature of the letting activity may all affect eligibility.

What happens if I exceed €50,000? Exceeding the annual limit can affect your eligibility for the following year. You may need to change IGIC regimes and submit a census notification. Obtain advice before the threshold is crossed.

Do I still submit tax declarations under REPEP? The usual periodic IGIC returns may not be required, but Modelo 425 and, where applicable, Modelo 415 or occasional Modelo 412 returns may still be necessary.

What happens if I miss the 31 July 2026 deadline? The Agencia Tributaria Canaria says a late Modelo 400 will not create inclusion under the exceptional July arrangement. You would continue under your existing IGIC regime unless another valid change applies.

Important — Read Before You Act

This information is general guidance and does not replace individual tax, accounting or legal advice.

Eligibility and IGIC treatment can depend on your residence, business structure, activities, customers, transaction locations, previous tax choices and total turnover across all activities.

Do not assume that earning under €50,000 automatically places you in REPEP. Do not remove IGIC from your invoices, stop submitting returns or submit Modelo 400 without confirming your position.

The transitional rules for entering REPEP from 1 July 2026 can also affect IGIC deductions, investment goods and year-end declarations.

What To Do — Step by Step

Check your total 2025 turnover Calculate your total volume of operations across all your business and professional activities. Use turnover before expenses, not profit or the amount transferred to your personal bank account. Certain exempt transactions and operations located outside the Canary Islands may still count towards the REPEP turnover calculation.
Confirm that your business structure is eligible Check whether you operate as an individual autónomo or professional, a company, a community of property or another type of organisation. REPEP is primarily available to qualifying individuals established in the Canary Islands. Companies and many other legal entities cannot use it.
Review the IGIC you pay on business expenses List the IGIC paid on your regular business expenses, including equipment, technology, materials, advertising, professional services and property costs. People using REPEP generally cannot deduct the IGIC paid on purchases connected with REPEP-exempt activities.
Check where your customers and transactions are located Identify whether your customers are in the Canary Islands, mainland Spain, elsewhere in the European Union or outside Europe. REPEP concerns IGIC. It does not automatically exempt transactions that are subject to mainland Spanish IVA or another country’s tax rules.
Compare the benefits and disadvantages Ask a qualified gestor or tax adviser to compare: IGIC you currently charge. IGIC you would lose the right to deduct. Regular and occasional returns required. The effect on customer prices. Planned business investments. Transitional adjustments for 2026. The effect of exceeding €50,000.
Submit Modelo 400 by 31 July 2026 if eligible The exceptional option must be exercised through a modified Modelo 400 between 1 and 31 July 2026. The form should show 1 July 2026 as the effective date of inclusion in REPEP.
Update your invoices and financial records Once your inclusion has been confirmed, update your invoicing and bookkeeping systems. Relevant invoices should normally include the wording: “Exención franquicia fiscal” Continue to issue and retain invoices, maintain the required registers and complete any annual or occasional declarations that apply.

Common Mistakes to Avoid

Treating the €50,000 figure as profit rather than turnover.
Assuming every autónomo below €50,000 is automatically included.
Forgetting to combine turnover from different business activities.
Assuming a limited company can use REPEP.
Ignoring customers and transactions outside the Canary Islands.
Focusing on reduced paperwork without calculating lost IGIC deductions.
Forgetting to consider planned equipment or property investments.
Applying after 31 July 2026 and expecting the decision to be backdated.
Changing invoices before confirming REPEP inclusion.
Assuming REPEP removes income tax or social-security obligations.
Believing that no quarterly return means no reporting responsibilities.
Submitting an IGIC return without checking whether it could count as a renunciation.

Your Action Checklist

Confirm my total 2025 turnover.
Include turnover from all my business and professional activities.
Confirm that I operate as an eligible individual.
Check that I am established in the Canary Islands.
Review the IGIC paid on my regular business expenses.
List any major purchases or investments planned.
Identify customers and transactions outside the Canary Islands.
Compare REPEP with my current IGIC arrangement.
Speak to a qualified gestor or Canary Islands tax adviser.
Submit Modelo 400 by 31 July 2026 if the exceptional option applies.
Obtain confirmation before changing my invoices.
Add the correct exemption wording to relevant invoices.
Check which annual or occasional declarations remain necessary.
Monitor my total 2026 turnover.
Review my tax position before the end of the year.

In Summary

Increasing the REPEP threshold to €50,000 could reduce administration and simplify IGIC for many self-employed people in the Canary Islands.

However, REPEP does not remove every tax obligation, and the inability to reclaim IGIC on business purchases can be a significant disadvantage.

If the exceptional 2026 option applies to you, Modelo 400 must be submitted no later than 31 July 2026. Compare the real financial effect with a qualified gestor or Canary Islands tax adviser before changing your invoices or tax returns.

Sue’s final thoughts & experiences

A personal note from Sue Berry

At first glance, being able to issue invoices without IGIC sounds like an obvious saving. But the simplest-looking option is not always the best financial choice.

For an autónomo with few expenses and mainly private customers, REPEP may make running the business easier. For someone investing in equipment, premises, technology or professional services, losing the ability to reclaim IGIC may make it less attractive.

Take a little time to compare the actual figures rather than making a decision based on the headline. A conversation with a good gestor now could prevent an expensive misunderstanding later.