VAT is not applied in the Canary Islands; instead there is a specific Sales Tax (IGIC) which has a general rate of 5%. Until we receive this clarification, we must charge you 15% VAT. The Canary Islands (/ k ə ˈ n ɛər i /; Spanish: Islas Canarias, pronounced [ˈislas kaˈnaɾjas]), also known informally as the Canaries, are a Spanish archipelago and the southernmost autonomous community of Spain located in the Atlantic Ocean, in a region known as Macaronesia, 100 kilometres (62 miles) west of Morocco at the closest point. yes. Your services are therefore being supplied outside the EU and the sale is outside the scope of UK or any other EU VAT. Viewed 2k times 5. The Canary Islands (/ k ə ˈ n ɛər i /; Spanish: Islas Canarias, pronounced [ˈislas kaˈnaɾjas]), also known informally as the Canaries, are a Spanish archipelago and the southernmost autonomous community of Spain located in the Atlantic Ocean, in a region known as Macaronesia, 100 kilometres (62 miles) west of Morocco at the closest point. We are a Swiss company and we are going to open a call center in Barcelona to serve our European (non-Spanish) clients. Or, if we don't charge them VAT, how would this affect our own VAT returns? It’s easy to be confused with the tax status of Lanzarote and the other Canary islands. Ceuta y Melilla. I've spent a few hours reading the internet for clues, but not sure I have found the correct answers. Also, the 3% rate would be … 4 … Their citizens and businesses do not pay VAT. Most of what I have read says that as we are making the supply (the survey as I read it) in the UK then I should charge UK VAT. Businesses established in the Canary Islands can benefit from tax cre… I really appreciate it. The Canary Islands include the individual islands of Gran Canaria, (Santa Cruz de) Tenerife, Las Palmas, Fuerteventura, Lanzarote, La Gomera And El Hierro In order to ensure a delivery on time, please ensure that your parcel has the full, correct address , an email address in the correct format and a mobile or landline number for the intended recipient. We have requested clarification from Luxembourg authorities, where we are based, as to how to treat low tax locations within the EU. I know I don't need to charge VAT on goods exported to the channel islands, but for the amount of goods we send there we do not want the additional work this will create. However, the specific nature of the outermost regions, one of which is the Canary Islands, is laid down in Article 349 of the Treaty on the Functioning of the European Union, which permits specific measures to be taken, particularly in the tax field, so as to take account of the particular characteristics and constraints of these regions. VAT; Quote; Related resources. Spanish VAT is called ‘Impuesto sobre el Valor Anadidio’, or ‘IVA’. If your company has a Spanish CIF and you are not invoicing companies outside Spain, then there is no reason for your company to apply for VIES. We are starting to manufacture our shoes in Spain. So, you neither have to charge VAT nor quote the customer's VAT number on your sales invoice. I operate a shoe company in the USA. He is supposed to not pay VAT, it is a specific rule for them even if they belong to Spain. URL Profiler is licensed through a reseller called FastSpring, and they natively support VAT exemption for buyers in the Canary Islands. If you are moving to the Canary Islands from within the EU, you can import most of your goods without any formalities, the only restriction is that you must have paid tax or VAT at purchase or owned the goods for more than 6 months. From 1st January 2019, the Canary Islands will implement the Spanish Immediate Supply of Information (SII) regime, which is a mandatory real-time electronic invoice reporting system. Requires your own AvaTax or Vertex account These territories require VAT collection and are not currently supported by Recurly's basic taxes. Has anyone had a similar situation or can help thanks. There are areas in Europe such as the Canary Islands that are outside the VAT system, so a VAT number for a company based in the Canary Islands will never show up in the VIES system. On 4 August 2020, the European Commission submitted a proposal for a Council Decision to continue authorising Spain to apply total exemptions from or partial reductions of the local AIEM tax in respect of some products that are produced locally in the Canary Islands (listed in the Annex of the Decision). If you accidentally charge VAT on the transaction, the customer will probably let you know to correct it. For example, if a customer from luxembourg buys from you, they still have to pay 20% VAT even though the Rate in there country is 15%. These tax exemptions or reductions may not result in tax differentials of more than 5, 10, 15 or 25% depending on the product and with the proviso that the 25% rate only applies to tobacco. Here in The Canaries, we are exempt from VAT, but we do pay a local sales tax on most goods, which is just 7%, so that’s another reason things often seem cheaper here. We have a UK company (software). When a Canarian company or professional does business with mainland Spain it will be considered as an operation without VAT. Charging VAT. Tax residency inspections. Your services are therefore being supplied outside the EU and the sale is outside the scope of UK or any other EU VAT. The Canary Islands are not part of Community territory for the purposes of VAT (Article 6 of VAT Directive). This has justified the implementation of a specific measure, which, by means of tax exemptions or reductions for local products, serves to. Do you deduct the VAT for deliveries to the Canary Islands? Treaty on the Functioning of the European Union. URL Profiler is licensed through a reseller called FastSpring, and they natively support VAT exemption for buyers in the Canary Islands. However EU lawmakers left space for Member State governments to determine how to implement the VAT Directive. To qualify for the ZEC status the following … Carrier Information for the Canary Islands. yes. As the Canary Islands are part of the EU, EU citizens do not require a visa to enter the country. (one off fee).Now, Canaries is technically in EU, but they say there is no VAT on the islands unlike mainland spain.To me, this is an export, so not VAT. I am wondering therefore, should we still charge them VAT and if so how would we/they claim this back if it is not applicable there. Treated as territory of France for customs, VAT and excise purposes. VAT rules apply. Although the Canary Islands are part of Spain, they (like the Channel Islands) are not part of the EU VAT territory. The VAT rules for every country are different. The special Canary Islands’ VAT known as IGIC has been reduced from 7% to 6.5%. In 1479 the Treaty of Alcáçovas recognized Spanish sovereignty over the Canaries, and the conquest of the remaining islands was completed in 1496. This can be reclaimed on the regular UK VAT return, subject to the normal rules about reclaiming input VAT. VAT does not exist in the Canary Islands, so if you are subscribing to a license from this region, you should not be charged VAT. Who is liable to remit VAT is one of the areas where local governments can carve the EU Directive to their needs. Main changes related to the Canary Islands Indirect Tax . Other countries or territories. Brexit has encouraged many people to move their business abroad and the Canary Islands – offering the most preferential tax rates in Europe – makes them a firm favourite. But, if technically in eu VAT not chargeable if they have a vat number. There is a local "IGIC" tax of 6.5%, but this only applies when billing clients who are also resident in the Canary Islands. Do I charge the Company in Virgin Islands VAT on our services. Blogs, pictures, forum Canary Islands on expat.com Presta Community, we just had a sale today for a customer made an order from Tenerife. That these regions are always exempt from VAT IGIC from 6.5 % 15! 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