Island of La Palma, Canary Islands, Spain


La Mancha Spa Hotel   investment project

  Tax Incentives

The Special Tax Regime (REF)


Although mainland tax regulations apply in the Canaries, companies operating there are also eligible for special tax incentives (the Special Tax Regime or (REF)


Key features of the REF are as follows:



The Special Economic Zone (ZEC)


The Canary Island’s Special Zone has been created within the fiscal and economic regime of the Canary Islands for the purpose of encouraging the economic and social development of the Islands and the diversification of the manufacturing and service sectors


The ZEC was created initially until the 31st December 2008 and was extended beyond, with the authorisation of the European Union


In early 2006, the Department of Economic Affairs and Finance of the Canary Island’s Government suggested the introduction of improvements to the Economy and Fiscal Regime, including the extension of the time frame of the low tax zone beyond 2008 of 25 years for Companies in the Industrial Sector. Any Company intending to carry out manufacturing, commercial or service activities within the territory of the Canary Islands may register in the ZEC; Financial Services are excluded


Service Companies registered under the ZEC may be set up in any part of the Canary Islands. Production Processing and Distributive activities must be located in certain designated areas and there areas are on each of the Canary Islands


Any  Company wishing to set up in the ZEC must satisfy a number of requirements, of which the most important are:



Taxation of ZEC Companies


ZEC Companies enjoy the following benefits:



The rate depends on:



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