Canary Islands IGIC small business scheme (REPEP): €50,000 limit from 2027

The Canary Islands have a special IGIC (the Canary Islands' indirect tax, similar to VAT) scheme for small self-employed businesses (autónomos), called REPEP (régimen especial del pequeño empresario o profesional). Its limit has gone up significantly. Here is a brief summary of who it suits and what it changes.

Who can use REPEP

autónomos carrying out their activity in the Canary Islands;
whose turnover for the previous year does not exceed the limit. For 2026, that means 2025 turnover up to €30,000; for 2027, 2026 turnover up to €50,000;
turnover is counted excluding IGIC and includes sales outside the Canary Islands.

If your turnover qualifies and you have not opted out of the scheme, it applies to you automatically.

In summer 2026 there was a one-off opportunity to join the scheme under the new limit by applying by 31 July. That deadline has passed, so for most people the new limit will take effect from 2027.

What changes in your filings

invoices carry no IGIC; instead they state “exención franquicia fiscal”;
instead of four quarterly IGIC returns (modelo 420), you file one annual information return (modelo 425);
the IGIC you pay on your own expenses cannot be recovered.

When it does not pay off

Your clients are mainly companies that recover IGIC anyway. For them a price without IGIC makes no difference, while you lose the ability to recover IGIC on your expenses.
You buy a lot or invest in equipment.
Your turnover will soon exceed €50,000: you would then have to move back to the standard scheme from the following year.

Important: opting out applies for three years

You can opt out of REPEP by filing an application (modelo 400) in January. But filing the quarterly return 420 for the first quarter also counts as opting out: if you file it on time, between 1 and 20 April, you leave the scheme. And you can only rejoin after three years. So before your first return of the year, it is worth checking which scheme suits you better.

What we will do

For our self-employed clients, at the start of 2027 we will calculate their 2026 turnover, advise whether REPEP makes sense and, if needed, file the relevant applications. Not a client yet? Write to us and we will look at your situation.

This article is based on Decreto-ley 3/2026 of 6 April 2026 and Decreto Legislativo 1/2025 (Canary Islands IGIC legislation). This is not legal advice. Updated September 2026.