When carrying out a billing operation at Canary Islands, Ceuta or Melilla, despite being Spanish territories, we must know and apply the taxes in the Canary Islands, Ceuta and Melilla that exist in these regions, because they are regulated by a special tax regime and must be applied billing rules of intra-community trade.
The majority of entrepreneurs and self-employed people on the peninsula, when they need to invoice a client located in the Canary Islands, Ceuta or Melilla, generate many doubts about what taxes should be applied. Next, we will resolve these types of doubts about the applicable taxes in these three places outside the peninsula.
What taxes should be taken into account?
First of all, VAT is not applied in any of these regionsOn the contrary, they use a series of taxes at local level. These taxes are, in the case of the Canary Islands, subject to the IGIC (General Indirect Canary Tax) and in the case of Ceuta and Melilla, they are subject to the IPSI (Tax on Production, Services and Imports of the cities of Ceuta and Melilla).
However, it is of great importance to differentiate whether it is a sale of products or one provision of service, and in the case of the latter, if it is a service to individuals or companies, given that in each of these situations apply different taxes and there are even situations where VAT will have to be applied.
Sale of products or provision of services?
There are a series of criteria to take into account when applying one tax or another in the Canary Islands, Ceuta and Melilla.
- Yeah you sell a product from the peninsula to the Canary Islands, Ceuta or Melilla, is considered an export operation, so it remains VAT exempt, and the client will be the one who must pay the IGIC or the IPSI, depending on the place where the sale is destined.
- Yeah you offer a service From the peninsula to the Canary Islands, Ceuta or Melilla, two different situations must be taken into account.
- If it is directed to an individual VAT must be applied, except if it is about some specific services such as electronics, broadcasting and telecommunications, in this case the IGIC or IPSI would be applied, as appropriate.
- On the contrary, if the service is directed to a company, the operation is carried out as exempt by the seller, and the recipient of the service will be the one who will declare the corresponding rate.
Furthermore, if the service is aimed at a company, there is also the Closing Rule, it is a clause that VAT will apply to services such as marketing, transfer of rights, consulting, advocacy, etc... if it is considered that these services They are used in peninsular territory.
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