Canary Islands drop IGIC on fuel, coffee, salt and butter starting Tuesday

The Canary Islands government has approved a decree‑law containing a series of fiscal, economic and direct‑support measures aimed at mitigating the effects of the international crisis triggered by the war in the Middle East. The decree will take effect upon its publication in the Official Gazette of the Canary Islands (BOC) and must be ratified by the Parliament of the Canary Islands.

The package adapts the state‑wide measures set out in Royal Decree‑Law 7/2026 of 20 March, which cannot be applied directly in the archipelago due to its specific tax regime, and reinforces the socio‑economic shield of a territory especially vulnerable as an outermost region.

The total cost of the measures is estimated at €29.8 million, potentially rising to €60 million annually if the crisis persists.

The decree is justified by the evolution of the conflict and its immediate impact on energy, fuel, transport and basic goods prices, with particular repercussions for strategic sectors such as transport, tourism, primary production and industry.

Fiscal measures on energy and fuels

• Temporary 0 % IGIC rate on energy products, including petroleum‑derived fuels, gas, biomass and firewood, to curb price hikes and reduce costs for families and businesses.
  Estimated cost: €14.1 million per year, €3.9 million for the initial 100‑day period defined by the state decree‑law.

• 99 % refund of the Special Fuel Tax for farmers and transport operators.
  Estimated cost: €19.4 million per year, €5.3 million for the initial 100 days.

Extension of 0 % IGIC to basic goods

• The decree adds salt, butter and coffee to the basket of essential items taxed at 0 % IGIC.
  Estimated impact: €3.2 million per year, €900 000 for the initial application period.

Support for self‑employed workers

• Raises the annual turnover ceiling to €50 000 to qualify for the special small‑business IGIC regime, reducing tax and administrative burdens (the so‑called tax‑declaration exemption).
• Voluntary scheme for self‑employed individuals meeting the criteria, with a transitional regime starting 1 July 2026.
  Estimated cost: €12.5 million for the current year.

Aid for the industrial and primary sectors

• Creation of an extraordinary fund to support the Canary Islands’ industrial and primary sectors, offsetting higher energy and production costs.
  Additional allocation: €7.2 million.

The Canary Islands government emphasizes that this decree‑law provides an immediate, tailored response to the archipelago’s unique circumstances, ensuring the effectiveness of support measures amid heightened international uncertainty. It also calls for future state measures to include a “Canary clause” that allows public policies to be adjusted to the islands’ specific conditions.