Free cookie consent management tool by TermsFeed Policy Generator


Law 19/1994, from July 6, modifying the economic and fiscal regime of the Canary Islands contains a set of economic measures - the so-called economic REF - intended to directly compensate for remoteness and insularity. The measures currently included in the Law refer to the following areas: transport and telecommunications; energy and water; commercial promotion; tourism promotion and rehabilitation; employment creation; investment incentives and professional training. The REF includes the following tax incentives and peculiarities:


The Canarian Special Zone is the most innovative fiscal instrument of the Canary Islands Special Economic and Fiscal Regime (REF), since it grants, for a wide list of activities and by meeting minimum requirements for job creation and investment, a reduced taxation in the Corporation Tax of 4%, with tax base limits based on job creation. It also has other tax advantages such as exemptions in the Tax on Patrimonial Transmissions and Documented Legal Acts and in the General Indirect Canarian Tax (IGIC). The duration of the ZEC runs until December 31, 2026 and can be extended with prior authorization from the European Commission.

Tax advantages for ZEC entities

»Taxation at a reduced rate of 4% in Corporation Tax on taxable base limits based on job creation.

» Exemption in the IGIC (General Indirect Canary Tax) for imports of goods made by ZEC companies as well as deliveries of goods and services made by ZEC entities among themselves.

» Exemption in the Tax on Patrimonial Transmissions and Documented Legal Acts for the acquisitions of goods and rights related to the activity in the geographical area of ​​the ZEC, the corporate operations (except their dissolution) and the documented legal acts related to the operations carried out by said entities in the geographical area of ​​the ZEC.

» Exemption in Non-Resident Income Tax for the profits distributed by the ZEC Entities to their parent companies and the interests and other income obtained by non-residents in Spain except when the income is obtained through countries or territories with which there is no effective exchange of tax information even when the parent company has its tax residence in one of those countries or territories.
Basic requirements to be a ZEC company

» Create at least 5 jobs (for the islands of Gran Canaria and Tenerife) or 3 jobs (for the rest of the islands) within the 6 months following registration in the Official Registry of Companies of the Special Zone of the Canary Islands and maintain this average during the years that it remains registered.

» Invest at least 100,000 euros (for the islands of Gran Canaria and Tenerife) or 50,000 euros (for the rest of the islands) in fixed assets related to the activity of the company within two years from the time of registration.

» Being a newly created entity with domicile and headquarters of effective management in the geographical area of ​​the ZEC.

» At least one of the administrators must reside in the Canary Islands.
Copyright 2020 Miranda World Tax Consulting, S.L.P.U.