Glossary
The terms, in plain English
The acronyms and terms you will come across when setting up an industrial operation in the Canary Islands.
Most of these terms belong to one framework: the REF, the islands' Economic and Fiscal Regime. It is the body of law that gives the Canary Islands their own tax rules inside the European Union, designed to offset the cost of being far from the mainland. If you are moving an operation here from abroad, the REF is where the real advantages — and the conditions attached to them — live.
This glossary is written for a foreign company, not a tax specialist. Each entry explains what a term means in practice and where it sits in the wider picture: the ZEC and its 4% corporate tax rate, the RIC reinvestment reserve, the IGIC that replaces VAT, and the AIEM levy that protects qualifying local production. Several also bear on a property decision, since whether you rent, buy or build changes how some of these rules apply to you.
Each entry links to a fuller explanation with its legal basis. The definitions are guidance, not advice: rates and thresholds change, and eligibility is judged case by case, so confirm the detail with a qualified adviser before you act.
- Canary Islands General Indirect Tax (IGIC)
- The Canary Islands' indirect tax, equivalent to VAT in mainland Spain but generally at lower rates. It applies to the purchase of premises when the seller is a business.
- Canary Special Zone (ZEC)
- A tax regime that lets qualifying companies established in the Canary Islands pay a reduced corporate tax rate of 4%, subject to activity, investment and job-creation requirements.
- Economic and Tax Regime (REF)
- The Canary Islands' own economic and tax framework, recognised by the EU, designed to offset remoteness and insularity. It includes instruments such as the ZEC, the RIC and the IGIC.
- Reserve for Investments in the Canary Islands (RIC)
- An incentive that lets companies reduce taxable profit if they commit those profits to qualifying investments in the Canary Islands, such as industrial premises, within set deadlines.
- Tax on Imports and Deliveries of Goods (AIEM)
- A Canary Islands duty on certain imports and deliveries of goods that helps protect local industrial production. It matters mainly to companies that manufacture on the islands.
General guidance only; not tax or legal advice. Last reviewed: June 2026.