Monetary advantages in the special Canarian Zone
Tenerife falls within the Special Canarian Zone ( ZEC) , an area of tax benefits created in 2000 in order to promote the economic and social development of the archipelago. Thanks to this system some of the companies set up on the island appreciate this tax system with lower taxes than in the rest of the European Union. One of the great advantages enjoyed by the companies within the ZEC zone is the reduction of tax which in this zone is only 4% as opposed to 32,5% in the rest of Spain. (www.zec.org)
As well as the tax benefits exclusive to companies in the ZEC zone one should take into account the tax which favours economic business activity on the island, the IGIC (Impuesto General Indirecto Canario). The IGIC tax substitutes the European IVA tax in the Canaries.