Tax advisory in Las Palmas de Gran Canaria is specialised in the Canary Islands Economic and Fiscal Regime (Régimen Económico y Fiscal de Canarias, REF), a unique set of state-aid-approved incentives applicable in Spain's Canary Islands archipelago. The centrepiece of the REF for international businesses is the Zona Especial Canaria (ZEC), which offers a 4% corporate income tax rate — the lowest available in mainland Spain and competitive with EU low-tax jurisdictions — for registered entities conducting qualifying activities (including ICT, consulting, logistics, and wholesale trade) with genuine economic substance, a minimum investment of EUR 100,000 in Gran Canaria, and at least five local employees; the registration deadline for new ZEC entities under the current European Commission authorisation is 31 December 2026.
Why 2026 is the decisive year for the ZEC and the future of Canary Islands tax planning
The Zona Especial Canaria is, without question, the most favourable fiscal regime in the Spanish tax system and one of the most competitive in the European Union: a 4% corporate tax rate, approved and protected by Brussels, with full access to the EU single market and Spain’s network of over 90 double taxation treaties.
The window of opportunity closes on 31 December 2026. The current ZEC regime was authorised by the European Commission with a registration deadline ending on that date. After it closes, no new entities can register under the current terms. Entities already registered in 2026 will retain the benefits throughout the authorised period (currently through 2026, with a possible extension). Those that are not registered will have permanently missed the opportunity.
Our Las Palmas tax team: Canarian REF and ZEC specialists
From the Las Palmas office we have the most specialised team in the Canary Islands Economic and Fiscal Regime outside the archipelago. We have managed the registration of dozens of ZEC entities, from technology startups to subsidiaries of European and Asian multinational groups that have chosen the Canary Islands as their gateway to Africa and Latin America.
Our work does not end at registration. The greatest risk for ZEC entities is not initial refusal — which rarely occurs if the application is well prepared — but loss of the regime through failure to meet the economic substance requirements during the entity’s life. We continuously monitor ZEC compliance parameters and alert clients when any indicator approaches the threshold.
We complement the ZEC with the rest of the special territories incentive catalogue: the Reserva para Inversiones en Canarias, investment deductions, the special shipping entity regime, and the IGIC particularities compared to mainland VAT.
How much your company could save with the ZEC: the calculation you need to make today
Consider a technology services or consulting company generating €2 million in pre-tax profit:
| Regime | IS Rate | IS Charge |
|---|
| Standard Spanish regime | 25% | €500,000 |
| Ireland-based entity | 12.5% | €250,000 |
| ZEC entity (full special base) | 4% | €80,000 |
The saving versus the standard rate is €420,000 annually. Versus the Irish rate, €170,000. And unlike Irish structures, the ZEC does not require specialist staff in Ireland and does not carry the substance risks under OECD/BEPS scrutiny that are currently in Brussels’ sights.
The special taxable base has a cap that varies with the number of employees and investment made, but for most service companies setting up in the Canary Islands, the ceiling is sufficient to capture all or most of the profits.
What our Las Palmas tax advisory service includes
From the Las Palmas office we provide: pre-commitment ZEC eligibility diagnostic, corporate structure and business plan design, registration application to the Consorcio ZEC, continuous regime compliance monitoring, annual IS management (Modelo 200 with ZEC regime), RIC, IGIC and other Canarian tax obligations, international group coordination, and AEAT and Consorcio defence in the event of a regime review.
For companies wishing to use Las Palmas as a hub for African operations — an increasingly common use case given that the archipelago is the geographically closest point to the African continent with full European infrastructure — we analyse the optimal structure and applicable double taxation treaties.
The ZEC registration deadline closes on 31 December 2026. If your company can benefit from the 4% rate, act now: registration takes between two and four months from application.
Book a ZEC eligibility consultation with our team at the Las Palmas office. We assess your position in the meeting itself and tell you whether your company qualifies and how much it would save.
Worked Example: ZEC Savings for a Technology Services Company
A European technology company (annual revenues: EUR 4.2 million, taxable profit: EUR 1.1 million) providing software development and consulting services to European clients established a ZEC entity in Las Palmas to manage its service operations for international clients.
Setup requirements:
- Minimum investment: EUR 100,000 in fixed assets (leasehold fit-out and IT equipment) — met within 12 months of registration.
- Minimum employment: 5 local employees — hired within the first 24 months of registration.
- Registered address: Las Palmas office with genuine operational activity.
- Eligible activity: technology consulting and ICT services — listed in the ZEC eligibility catalogue.
Tax savings (year 3, post-ramp-up):
- Taxable profit attributable to ZEC special taxable base: EUR 880,000
- ZEC corporate tax at 4%: EUR 35,200
- Tax at standard 25% rate (without ZEC): EUR 220,000
- Annual saving: EUR 184,800
RIC deployment: In year 2, the company reserved EUR 700,000 of its Canarian profits into the Reserva para Inversiones en Canarias — a 90% taxable base deduction — invested in new IT infrastructure and a Canarian real estate asset within the required three-year window. The RIC deduction reduced the effective IS rate in year 2 to approximately 2.5% on the reserved amount.
Combined annual tax saving (ZEC + RIC, year 3 onwards): approximately EUR 190,000–200,000. Against an advisory and operational cost of approximately EUR 45,000 per year (all-in: advisory, rent, 5 employees), the net annual benefit of the Las Palmas structure exceeds EUR 150,000.
Spain has double taxation treaties covering more than 90 countries. The Canary Islands, as part of the Spanish treaty network, benefit from reduced withholding rates on dividends, interest, and royalties between Spain and treaty partners — including Morocco, Mexico, Brazil, Chile, Colombia, Argentina, and most EU Member States.
For companies with significant African or Latin American commercial activities, the Canary Islands offers a unique combination: Spanish treaty network coverage, EU infrastructure and rule of law, logistical proximity to key African ports (Las Palmas is the closest major European port to West Africa), a 4% corporate tax rate for ZEC entities, and a time zone that overlaps with both European and American business hours.
We have structured ZEC platforms for companies operating in Mauritania, Morocco, Senegal, Guinea, and other West African jurisdictions — using the Las Palmas office as the management and services hub and the Spanish treaty network to optimise the withholding tax position on income flowing between the African subsidiaries and the ZEC entity.
Five Pre-Engagement Questions for ZEC and REF Planning
- Does your company’s current or planned activity appear on the ZEC eligible activities catalogue, and does your actual business model meet the substance requirements (genuine employees, real operational management, economic activity) that the Consorcio ZEC requires for ongoing eligibility?
- Have you calculated the ZEC special taxable base for your company — the income eligible for the 4% rate — and modelled how it changes as you grow, including the per-employee and geographic limits?
- Is the investment threshold (EUR 100,000 in Gran Canaria or EUR 50,000 on smaller islands) achievable within two years through your normal capex budget, or does it require a specific Canarian investment strategy?
- Does your company generate Canarian profits eligible for the RIC, and have you identified the eligible investment vehicles (fixed assets, bonds, investments in other Canarian entities) within the three-year reinvestment window?
- If your company is already operating in the Canary Islands without ZEC status, what would the retroactive registration achieve — and is the 2026 deadline close enough that you should be acting immediately?
Our Las Palmas tax advisory does not operate in isolation. International companies establishing ZEC structures typically need coordinated advisory across: corporate structuring (our entity management team), employment law for local hires (our employment law team), IGIC management (coordinated with the Las Palmas AEAT office), and international tax planning for the group (our international tax team advising on treaty application and transfer pricing between the ZEC entity and other group entities). All of this is available from within the BMC platform, coordinated by the Las Palmas lead adviser and integrated into a single advisory relationship.
IGIC: The Canary Islands Indirect Tax System
The Canary Islands do not apply mainland Spain’s Impuesto sobre el Valor Añadido (VAT). Instead, the archipelago operates the Impuesto General Indirecto Canario (IGIC), established by Ley 20/1991. The general IGIC rate is 7% — compared to 21% for mainland VAT — with reduced rates of 3% and 0% for specified goods and services.
Key IGIC differences that affect businesses entering the Canary Islands:
- Goods imported into the Canary Islands from mainland Spain are subject to IGIC and the AIEM (Arbitrio sobre las Importaciones y Entregas de Mercancías en las Islas Canarias — Import and Delivery Tax), not VAT.
- Exports from the Canary Islands to mainland Spain are treated as intra-EU supplies for IGIC purposes but require specific documentation.
- Services between a Canarian entity and a mainland Spanish entity follow special territorial rules that differ from standard VAT place-of-supply rules.
- IGIC registration and compliance is managed by the AEAT Canarias, not the mainland AEAT delegations — with its own forms (Models 420, 421, 411, 412), filing deadlines, and audit practices.
For ZEC entities with both Canarian and mainland or international activities, managing the IGIC position correctly — including the recovery of IGIC incurred on purchases against the output IGIC on supplies — is a critical component of the tax planning that reduces the effective cost of the structure. We manage IGIC compliance for all our Canarian clients as part of the integrated Las Palmas advisory service.
Regulatory Compliance Under the Consorcio ZEC
Maintaining ZEC status requires ongoing compliance with the Consorcio ZEC’s annual reporting requirements. Each year, ZEC entities must demonstrate: (1) maintenance of the minimum employment level (5 employees); (2) continuation of the registered eligible activity; (3) maintenance of the minimum investment level; and (4) accurate calculation and declaration of the ZEC special taxable base.
The Consorcio ZEC conducts periodic reviews of registered entities and can revoke ZEC status if compliance requirements are not met — triggering a regularisation of the tax saved under the preferential rate for the non-compliant periods. We manage the annual compliance process, prepare the required Consorcio reporting, and advise on any structural changes (staff reductions, activity modifications, investment disposals) that could affect ZEC eligibility, ensuring proactive management of the risk rather than reactive crisis response. For companies with existing ZEC registration that have not been audited by an independent adviser in the past two years, we offer a ZEC compliance health check — a structured review of the entity’s ongoing eligibility and documentation — as a standalone engagement. Contact our Las Palmas office to book a consultation before the December 2026 deadline for new registrations closes permanently.
Las Palmas as a tax planning centre
Las Palmas de Gran Canaria occupies a unique position in the Spanish fiscal geography. As the principal city of the Canary Islands — an EU outermost region with a constitutionally recognised distinct economic and fiscal regime (Régimen Económico Fiscal de Canarias, REF) — Las Palmas offers a combination of tax advantages that are unavailable anywhere else in Spain or in most of Europe.
The most significant of these advantages is the Zona Especial Canaria (ZEC): a 4% corporate income tax rate for qualifying entities, valid under EU State Aid authorisation through 31 December 2026. For businesses that can demonstrate genuine economic activity in Las Palmas — management presence, employment, and investment — the ZEC regime offers an IS rate that compares favourably with Ireland’s 12.5% headline rate and is significantly below the EU average.
Beyond ZEC, Las Palmas-based businesses benefit from: IGIC (the local equivalent of VAT) at a general rate of 7% compared to mainland IVA at 21%, RIC (Reserva para Inversiones en Canarias) deductions of up to 90% of undistributed profits for reinvestment in Canary Islands assets, and AIEM protections for certain locally produced goods.
Who benefits most from Las Palmas tax structures
The Las Palmas tax ecosystem is particularly advantageous for:
International trading companies and service businesses: entities with a significant proportion of international income — whether from services exported to non-Spanish clients, trading of goods through the Canary Islands free port infrastructure, or financial and IP structures with an international dimension — can achieve very low effective IS rates through ZEC combined with the REF framework.
Digital economy and remote-work businesses: the Startup Law digital nomad visa and the Ley Beckham regime for remote workers have made the Canary Islands attractive for internationally mobile professionals and founders. The combination of Ley Beckham (24% flat IRNR rate for qualifying individuals) and ZEC (4% IS for qualifying companies) creates a genuinely competitive fiscal environment for digital economy businesses establishing European operations.
Real estate investment vehicles: the Canary Islands real estate market — driven by tourism and international buyer demand — combined with IGIC advantages and REF planning tools creates opportunities for structuring real estate investments tax-efficiently from Las Palmas.
Maritime and logistics businesses: the Canary Islands’ strategic location as a transshipment hub between Europe, Africa, and the Americas, combined with REF incentives for maritime activity, makes Las Palmas attractive for shipping, logistics, and bunkering businesses.
Our Las Palmas team
Our Las Palmas office provides the full advisory service — ZEC registration and compliance, corporate tax planning, international tax structuring, accounting, payroll, and corporate secretarial — with direct coordination with our Madrid, Málaga, and Marbella teams for transactions and structures with a mainland or international dimension.
We also provide Ley Beckham advisory for individuals relocating to Las Palmas, and non-resident tax compliance for international investors with Canary Islands property or business interests.
ZEC deadline: the 2026 urgency
The current ZEC authorisation expires on 31 December 2026. Entities that register before that date will continue to benefit from the 4% rate for the duration of their registration (typically up to 20 years from registration, subject to ongoing compliance). Entities that miss the current window must await the outcome of the extension authorisation process — which, while expected, is not guaranteed and may involve modified conditions.
For businesses considering ZEC registration, acting in 2026 is materially better than deferring. Our ZEC advisory process — from initial feasibility assessment to completed registration — typically takes three to six months.
Contact our Las Palmas office for a ZEC eligibility assessment and REF planning consultation.