A consultancy aimed at Italian investors highlights the Canary Islands as the European region with the most favorable tax regime for economic activity. This situation is due to its status as an outermost region within the European Union, allowing it to offer more advantageous taxation than mainland Spain and other member states, without falling into the problems of tax havens.
Despite these advantages, the “nationalist” Government of Canarias has expressed complaints about alleged discrimination by the Spanish Government. The vice-president has even described some national policies as “Gothic decrees”. Simultaneously, there is discussion about limiting the entry and establishment of people on the islands through a residency law, while facilitating capital investments from abroad. This stance raises questions about whether real estate speculation, driven by large investors, contributes more to rising rents than the arrival of workers.
If we have an economic and fiscal regime different from that of Spain, why do we complain about the Spanish Government when discussing economic and fiscal issues?
The Canarian REF, which includes figures such as the Canary Islands Special Zone (ZEC), the Canary Islands Investment Reserve (RIC), and the Canary Islands General Indirect Tax (IGIC), is not a privilege but a strategic tool with historical roots dating back to the 16th century, when Queen Isabella of Castile granted tax exemptions to encourage the islands' population. This regime allows ZEC companies to pay a 4% corporate tax, compared to the usual 25% in Spain, and a general IGIC of 7%, in contrast to the 21% VAT on the mainland.
The existence of this differentiated regime prompts reflection on Canarias' “fiscal culture”. It is assumed that, due to its outermost and fragmented nature, the islands forgo sufficient tax collection, expecting Madrid and Brussels to finance infrastructure and public services. This dynamic leads to situations such as media outcry in Canarias when the Spanish Government announces VAT reductions, arguing that these do not benefit the islands as this tax is not applied there. The central question is whether blaming an “external enemy” is more practical than seeking internal solutions to the region's economic and fiscal problems.
