Prices in the Canary Islands differ from mainland Spain partly because the islands do not apply VAT (IVA). Instead they use their own consumption tax, IGIC, with a general rate of 7% compared with 21% VAT on the mainland. Some goods are cheaper as a result, while others cost more because they must be shipped from the mainland.
IGIC vs IVA
| Canary Islands | Mainland Spain | |
|---|---|---|
| Tax | IGIC | IVA (VAT) |
| General rate | 7% | 21% |
| Reduced rates | Yes, including 0% and 3% for many basics | 10% and 4% |
What tends to be cheaper
- Fuel.
- Alcohol and tobacco.
- Electronics and perfume in many shops.
- Restaurant bills, which include IGIC.
What can be dearer
- Some imported food and branded goods, because of shipping.
- Online purchases from mainland Spain or the EU, which may involve extra customs paperwork or charges.
Shopping online
Because the Canaries are outside the EU VAT area, some online shops do not deliver here, charge extra or apply import procedures. Check before ordering.
Our verdict
IGIC is one reason daily life in the Canaries is good value. See Is the Canary Islands Cheaper Than the UK in Winter?