Although the United Kingdom is the main tourism market for the Canary Islands, these do not have an agile and simple system for the refund of consumption taxes to tourists from third countries (outside the European Union), such as the British. It’s about the the only autonomous community that does not have an efficient ‘tax free’, as denounced by merchants. These point out that the situation harms the Archipelago compared to other competitors in terms of shopping tourism.
A Statewide, the VAT refund (Value Added Tax) is managed through a digital validation system called DIVA and that it is managed by the Tax Agency (AEAT). In addition to being simple – it can be processed through a form and some machines in the customs section of the airport itself – the Spanish process is considered the best in Europe.
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Digital validation system called DIVA | Tax agency
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But why doesn’t it work in the Canary Islands?
It should be remembered that the autonomous community of The Canary Islands have a special fiscal policy, due to its status as an Outermost Region of the European Union. In fact, the Canarian tax system manages it Canary Islands Tax Agency and the consumption tax of the Islands is called IGIC (Canary Islands General Indirect Tax). This tax is what tourists are entitled to claim.
The Canary Islands Tax Agency is the entity that should implement a ‘tax free’ system for the Archipelago. However, despite the fact that it has the legislative framework and that there is already an agile process at the national level, the Canary Islands still maintains a system that implies a lot of bureaucracy and that annoys even the most persistent tourist.
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A claim of the commercial sector for years
The Commerce de las Islas, supported by the CEOE, the Canarian Confederation of Entrepreneurs (CCE) and the Chambers of Commerce, has claiming the implementation of a digital IGIC refund system since the United Kingdom began to propose its exit from the European Union (Brexit).
And it is that, according to a study by the Complutense University of Madrid, Canarian commerce – and other sectors – have no lack of reasons to claim an agile ‘tax free’ system, since would contribute:
- The spending on purchases of tourists would increase -only in the Canary Islands- between 31.5 and 37 million of euros per year.
- An impact – both direct and indirect – is estimated on the Canary Islands GDP between 78.6 and 92.6 million of euros.
- The ‘tax free’ system would also function as a Tourist claim more: it is estimated that they could visit the Islands 169,000 more people year.
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