2025 tax incentives for Autónomos in the Canary Islands

The Canary Islands aren't just a paradise of sun-kissed beaches and vibrant culture; they're also a haven for freelancers seeking a supportive and advantageous environment to grow their businesses. 

Xolo's recent expansion into this idyllic archipelago, means that managing your freelance endeavors has never been more seamless. Let's explore the enticing tax incentives available to freelancers in the Canary Islands and how Xolo can be your trusted partner in navigating them.

Welcoming tax incentives for freelancers

Embark on a freelance journey in the Canary Islands, and you’ll discover several financial perks. These tax incentives are designed to lighten your load, and provide autónomos with greater financial security.

If you’ve just moved to the Canaries, or missed out on deducting your home office space, then kick-back and enjoy:

• Zero-rate social security contributions: Starting January 1, 2024, new self-employed individuals can partake in a zero-rate social security contribution during their first year of activity. This initiative significantly reduces initial expenses, allowing you to invest more into your budding business. After the first year, reduced rates continue, provided your net income remains below the Minimum Interprofessional Wage (SMI). Once this threshold is surpassed, standard contribution rates apply. 

Curious to know more about this? Xolo just launched a partnership with Potenciate10 to help autónomos make the most of the zero-rate social security contributions. We’ve got a lot more info on this partnership and how you can tap in.

• Home office expense deductions: If your home doubles as your office, you're in luck! Freelancers can deduct 30% of expenses related to energy, water and telephone services, provided these costs are directly associated with business activities. This deduction makes working from your cozy home office even more incentivizing.

Reduced VAT (IGIC)

Instead of Spain's standard VAT, the Canary Islands levy the Impuesto General Indirecto Canario (IGIC), with a general rate of 7%. This lower rate applies to most goods and services, resulting in cost savings for both businesses and consumers. 

Certain essential items may benefit from even lower rates or exemptions. Get the full overview here. 

Renta deductions

If you lived in the Canary Islands before 2025, you might be sitting on a goldmine of tax deductions without even realizing it! Check out this list of tax deductions from 2023 for example. 

From home renovations and rental expenses to education costs, family benefits and eco-friendly donations, the region offers unique tax incentives that could significantly lower your overall tax bill. Whether you’re a freelancer, or a business owner, you could be eligible for deductions on housing, moving expenses, childcare, healthcare, unemployment and even cultural or environmental contributions. 

Xolo is your companion in compliance and convenience

Navigating the administrative landscape can be daunting, but that's where Xolo steps in to make your freelance life in the Canary Islands a breeze:

• Effortless IGIC invoicing: Managing the Impuesto General Indirecto Canario (IGIC), the local equivalent of VAT, is simplified with Xolo. Our platform automatically applies the correct IGIC rates to your invoices, ensuring all necessary compliance without the unnecessary hassle.
• Stress-free tax filings: Taxes can be overwhelming, but not with Xolo by your side. Our team of expert accountants handles your quarterly and annual tax filings, including:
  • Modelo 130: Quarterly payments of IRPF (Personal Income Tax)
  • Modelo 111 and its annual summary, Modelo 190
  • Modelo 115 and its annual summary, Modelo 180
  • Modelo 347 for operations with third parties
  • Coming soon: Modelo 420 for IGIC submissions and Modelo 415 for operations with clients and suppliers in the Canary Islands
• With Xolo, you can rest easy knowing your tax obligations are meticulously managed.
• Seamless autónomo registration: Starting your freelance journey? Xolo assists you in registering as an autónomo with both the Spanish national tax agency and the Agencia Tributaria Canaria, ensuring all the paperwork is handled efficiently.
   

Why choose Xolo in the Canary Islands?

Xolo’s more than just some accounting service; we're on a mission to make career freelancers.

Our products have been handcrafted from nearly a decade of freelancer feedback, data and problem-solving. In the Canary Islands, this now means:

• Localized support: Our services are tailored to meet the unique requirements of freelancers in the Canary Islands, from handling IGIC-specific invoicing to complying with regional tax reports like Modelo 415 and Modelo 420.
• Expert guidance: Our team of expert accountants ensures your tax filings are accurate and compliant, so you can breathe easy.
• Time-saving automation: With features like automatic IGIC rate application and pre-filled tax forms, Xolo saves you time and eliminates errors, allowing you to focus on what you do best—growing your business.

The Canary Islands offer a fertile ground for freelancers, with tax incentives that make it an attractive place to establish and grow your business. With Xolo's comprehensive services, you can navigate these opportunities effortlessly, ensuring compliance and maximizing your potential in this paradise.

Elevate your freelance career in the Canary Islands. Join Xolo.