Is Canary Islands a tax haven?

The canaries are an EU tax haven, although not in the traditional sense: this jurisdiction, part of Spain, makes available many tools for tax planning of known companies. First, the Canaries tax system is easier and with lesser tax burden than other European countries, fully legal and authorized by European Commission.



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As an example, the Canaries are not part of the European VAT but instead they have a local consumer tax with a standard rate of 7% (much lower than the minimum 15% rate set by EU to each of their member states), besides this, without a doubt, the principal attraction for investors is that the region has by far the ...

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Lanzarote, and the rest of The Canary Islands are duty free, therefore most countries apply limits as to what can be brought back after a visit. The temptation, particularly with cigarettes and tobacco, is to take back more than the allowance, because some big profits can be made as the cost saving is significant.

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The cost of living in the Canary Islands is considerably lower than in the United States. Housing, food, and transportation are much more affordable on the islands. While some tourist areas are more expensive than others, overall, it is a very affordable place to live.

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Tenerife has the best tax regime in Europe, through the Canary Islands Special Zone (ZEC), with a 4% Corporate Tax, instead of 30% of the general regime and well below the European average.

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There are exceptions depending on whether or not you are a resident of Spain and which region you are in. The regional government announced the end of wealth tax in Andalucia as of the 2023 tax year. The only other region where paying Wealth Tax is exempt is Madrid.

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For non-residents of the EU, the tax rate is 24%. Example: If the cadastral value of the property is 200.000 Euros and the taxable base is 2.200 Euro (1.1% as mentioned above).

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Currently the Canary Islands doesn't have a tourist tax, but there are ongoing in-depth talks about whether one should be introduced, how much it would be, and how to implement it.

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Companies located in the Free Trade Zone of Gran Canaria enjoy a series of specific customs and tax advantages as a result of the legislation relating to free zones in the European Union and the REF in the Canary Islands. Exemption from the payment of duty upon entry of goods in the area.

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The Community of Madrid is known for having one of the lowest tax burdens for low incomes in Spain. The regional Personal Income Tax (IRPF) rates are relatively lower, resulting in lower tax payments for individuals with lower incomes.

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Bermuda, Monaco, the Bahamas, and the United Arab Emirates (UAE) are four countries that do not have personal income taxes.

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Which Are the Tax-Free States? As of 2023, Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming are the only states that do not levy a state income tax. Note that Washington does levy a state capital gains tax on certain high earners.

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Go for Tenerife if you prefer popular tourist destinations with great restaurants and nightlife. On the other hand, Gran Canaria is your best bet if you want to explore the breathtaking landscapes and outstanding beaches.

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Most of Tenerife drinking tap water comes from desalinated sea water and doesn't have a good taste, it's fine for bathing or washing clothes, etc. For drinking, tea, coffee or ice always use bottled water. Some people experience upset tummies and other digestive problems that possibly are caused by the tap water.

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The Canary Islands are one of a group of nine territories that are part of the EU but are situated outside of Europe and known as the “outermost regions” (OMR). These territories are outside of the EU's customs and VAT regulations. Therefore, when you purchase any products in Tenerife, you do not pay VAT.

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