IGIC at 0% on fuels and food: what changes in the Canary Islands from July 2026

Key data

The Canary Islands faces the Middle East crisis with a battery of urgent fiscal measures that directly reduce the energy and food bills of companies and citizens in the archipelago. The Decree-law 3/2026, of April 6, justifies these measures in the greater structural vulnerability of the Canary Islands as an outermost region against disruptions in energy and transport markets. All measures enter into force on July 1, 2026.

What does this regulation establish?

Decree-law 3/2026 articulates four differentiated blocks of measures:

1. Zero IGIC rate on energy and fuels

The 0% IGIC rate is applied to the following energy products:

• Petroleum and its derivatives
• Natural gas
• Biomass
• Firewood

2. Expansion of the basic food basket at zero rate

Three new products are added to the list of food items with 0% IGIC:

• Salt
• Butter
• Roasted coffee

3. Refund of special fuel tax

The refund of the Special Fuel Tax is increased to 99.99% for two groups:

• Farmers
• Transporters

4. Change in the small business threshold (IGIC)

This change means that self-employed workers and micro-enterprises with annual invoicing below €50,000 are exempt from the obligation to charge IGIC, simplifying their tax management.

5. Complementary direct aid

Direct aid is provided for the following Canary Islands productive sectors:

• Agricultural sector
• Livestock sector
• Fishing sector
• Canary Islands industrial sector

Economic and operational impact

The most immediate impact is the direct reduction in energy costs for any company or self-employed worker that purchases fuel, gas or biomass in the Canary Islands. By moving IGIC to 0%, the savings equal the rate that was previously applied to each energy invoice.

For farmers and transporters, the refund of 99.99% of the special fuel tax is practically a total exemption. In practice, the tax cost of professional fuel is eliminated.

The increase in the small business threshold from €30,000 to €50,000 has a relevant operational effect: self-employed workers and micro-enterprises that invoiced between €30,001 and €50,000 annually and were obligated to manage IGIC no longer are. This reduces administrative burden and the risk of errors in tax settlement.

Complementary direct aid for agricultural, livestock, fishing and industrial sectors adds an additional layer of economic compensation, although the specific amounts of each aid are not detailed in the decree-law and will be developed in specific calls.

Who does it affect?

• Companies and self-employed workers in the Canary Islands that purchase fuel, natural gas, biomass or firewood for their activity: they benefit from the 0% IGIC rate on energy.
• Canary Islands farmers: refund of 99.99% of special fuel tax + access to direct aid from the agricultural sector.
• Transporters based in the Canary Islands: refund of 99.99% of special fuel tax.
• Canary Islands livestock and fishing sector: access to complementary direct aid.
• Canary Islands industrial sector: access to complementary direct aid and reduced energy costs.
• Self-employed workers and micro-enterprises with invoicing between €30,001 and €50,000: move to the small business exemption regime, without obligation to charge IGIC.
• End consumers in the Canary Islands: price reduction on fuels and on salt, butter and roasted coffee.

Practical example

Case: self-employed transporter in the Canary Islands with annual diesel spending of €40,000

Before the decree-law, this transporter bore the corresponding IGIC on fuel purchases and recovered part of the special tax, but not all of it. From July 1, 2026:

• IGIC on diesel invoices moves to 0%, eliminating that tax cost at source.
• The refund of special fuel tax rises to 99.99%, which is equivalent to recovering practically all of that tax.

Additionally, if this transporter invoices less than €50,000 annually, they automatically move to the small business exemption regime in IGIC, also eliminating the obligation to file periodic tax settlements.

Case: Canary Islands farmer who purchases biomass and firewood for their operation: both products move to 0% IGIC, and the special tax on agricultural fuel is refunded at 99.99%. The tax cost of their operation's energy supply is practically zero.

What should companies do now?

1. Verify if your activity consumes fuels, natural gas, biomass or firewood in the Canary Islands: from July 1, 2026, these purchases should not carry IGIC. Check that your suppliers apply the 0% rate on their invoices.
2. If you are a farmer or transporter: make sure your accountant or tax advisor processes the refund of special fuel tax at the new rate of 99.99%. Review if the application procedure needs to be updated.
3. Review the invoicing threshold: if your annual invoicing is between €30,001 and €50,000, consult with your advisor if you move to the small business exemption regime in IGIC from July 1, 2026 and what formal obligations disappear.
4. Update your invoicing software: make sure that the IGIC rates applied to fuels and new basic food items (salt, butter, roasted coffee) are updated to 0% before the entry into force date.
5. Stay alert to direct aid calls: if you operate in the agricultural, livestock, fishing or industrial sectors in the Canary Islands, the decree enables complementary aid. Follow Canary Islands Government publications to learn about deadlines and requirements for each call.

Official source

View complete regulation in official source

Notice: This article is for informational purposes only and does not constitute legal advice. For specific decisions, consult a qualified professional. Source: https://www.boe.es/diario_boe/txt.php?id=BOE-A-2026-12302